Correlation Between Hawaiian Electric and Gabelli Utilities
Can any of the company-specific risk be diversified away by investing in both Hawaiian Electric and Gabelli Utilities 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 Hawaiian Electric and Gabelli Utilities into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hawaiian Electric Industries and Gabelli Utilities, you can compare the effects of market volatilities on Hawaiian Electric and Gabelli Utilities 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 Hawaiian Electric with a short position of Gabelli Utilities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hawaiian Electric and Gabelli Utilities.
Diversification Opportunities for Hawaiian Electric and Gabelli Utilities
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hawaiian and Gabelli is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Hawaiian Electric Industries and Gabelli Utilities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gabelli Utilities and Hawaiian Electric 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 Hawaiian Electric Industries are associated (or correlated) with Gabelli Utilities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gabelli Utilities has no effect on the direction of Hawaiian Electric i.e., Hawaiian Electric and Gabelli Utilities go up and down completely randomly.
Pair Corralation between Hawaiian Electric and Gabelli Utilities
Allowing for the 90-day total investment horizon Hawaiian Electric is expected to generate 1.69 times less return on investment than Gabelli Utilities. In addition to that, Hawaiian Electric is 3.04 times more volatile than Gabelli Utilities. It trades about 0.03 of its total potential returns per unit of risk. Gabelli Utilities is currently generating about 0.18 per unit of volatility. If you would invest 598.00 in Gabelli Utilities on September 1, 2024 and sell it today you would earn a total of 19.00 from holding Gabelli Utilities or generate 3.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Hawaiian Electric Industries vs. Gabelli Utilities
Performance |
| Timeline |
| Hawaiian Electric |
| Gabelli Utilities |
Hawaiian Electric and Gabelli Utilities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hawaiian Electric and Gabelli Utilities
The main advantage of trading using opposite Hawaiian Electric and Gabelli Utilities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hawaiian Electric position performs unexpectedly, Gabelli Utilities 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 Gabelli Utilities will offset losses from the drop in Gabelli Utilities' long position.| Hawaiian Electric vs. DTE Energy | Hawaiian Electric vs. Alliant Energy Corp | Hawaiian Electric vs. Ameren Corp | Hawaiian Electric vs. CenterPoint Energy |
| Gabelli Utilities vs. Rationalpier 88 Convertible | Gabelli Utilities vs. Calamos Dynamic Convertible | Gabelli Utilities vs. Federated Ultrashort Bond | Gabelli Utilities vs. Ultra Short Fixed Income |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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