Correlation Between Gabelli Utility and OFS Credit
Can any of the company-specific risk be diversified away by investing in both Gabelli Utility and OFS Credit at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Gabelli Utility and OFS Credit into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Gabelli Utility and OFS Credit, you can compare the effects of market volatilities on Gabelli Utility and OFS Credit and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Gabelli Utility with a short position of OFS Credit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gabelli Utility and OFS Credit.
Diversification Opportunities for Gabelli Utility and OFS Credit
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Gabelli and OFS is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding The Gabelli Utility and OFS Credit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OFS Credit and Gabelli Utility is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on The Gabelli Utility are associated (or correlated) with OFS Credit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OFS Credit has no effect on the direction of Gabelli Utility i.e., Gabelli Utility and OFS Credit go up and down completely randomly.
Pair Corralation between Gabelli Utility and OFS Credit
Assuming the 90 days trading horizon Gabelli Utility is expected to generate 2.06 times less return on investment than OFS Credit. In addition to that, Gabelli Utility is 2.32 times more volatile than OFS Credit. It trades about 0.03 of its total potential returns per unit of risk. OFS Credit is currently generating about 0.14 per unit of volatility. If you would invest 2,126 in OFS Credit on September 14, 2024 and sell it today you would earn a total of 264.00 from holding OFS Credit or generate 12.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Gabelli Utility vs. OFS Credit
Performance |
| Timeline |
| Gabelli Utility |
| OFS Credit |
Gabelli Utility and OFS Credit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gabelli Utility and OFS Credit
The main advantage of trading using opposite Gabelli Utility and OFS Credit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gabelli Utility position performs unexpectedly, OFS Credit can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in OFS Credit will offset losses from the drop in OFS Credit's long position.| Gabelli Utility vs. The Gabelli Equity | Gabelli Utility vs. Virtus AllianzGI Convertible | Gabelli Utility vs. The Gabelli Equity | Gabelli Utility vs. Oxford Lane Capital |
| OFS Credit vs. The Gabelli Equity | OFS Credit vs. The Gabelli Equity | OFS Credit vs. General American Investors | OFS Credit vs. The Gabelli Utility |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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