Correlation Between Gabelli Utility and China Fund
Can any of the company-specific risk be diversified away by investing in both Gabelli Utility and China Fund 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 China Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gabelli Utility Closed and China Fund, you can compare the effects of market volatilities on Gabelli Utility and China Fund 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 China Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gabelli Utility and China Fund.
Diversification Opportunities for Gabelli Utility and China Fund
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Gabelli and China is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Gabelli Utility Closed and China Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Fund 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 Gabelli Utility Closed are associated (or correlated) with China Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Fund has no effect on the direction of Gabelli Utility i.e., Gabelli Utility and China Fund go up and down completely randomly.
Pair Corralation between Gabelli Utility and China Fund
Considering the 90-day investment horizon Gabelli Utility Closed is expected to under-perform the China Fund. But the fund apears to be less risky and, when comparing its historical volatility, Gabelli Utility Closed is 1.99 times less risky than China Fund. The fund trades about -0.13 of its potential returns per unit of risk. The China Fund is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 966.00 in China Fund on August 28, 2024 and sell it today you would earn a total of 189.00 from holding China Fund or generate 19.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gabelli Utility Closed vs. China Fund
Performance |
| Timeline |
| Gabelli Utility Closed |
| China Fund |
Gabelli Utility and China Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gabelli Utility and China Fund
The main advantage of trading using opposite Gabelli Utility and China Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gabelli Utility position performs unexpectedly, China Fund 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 China Fund will offset losses from the drop in China Fund's long position.| Gabelli Utility vs. Gabelli Convertible And | Gabelli Utility vs. Gabelli Equity Trust | Gabelli Utility vs. Gabelli Healthcare WellnessRx | Gabelli Utility vs. GAMCO Natural Resources |
| China Fund vs. Ashmore Group Plc | China Fund vs. Mexico Equity And | China Fund vs. Western Asset Managed | China Fund vs. Blackrock Muniholdings Quality |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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