Correlation Between Orchid Island and Gabelli Utility
Can any of the company-specific risk be diversified away by investing in both Orchid Island and Gabelli Utility 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 Orchid Island and Gabelli Utility into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Orchid Island Capital and Gabelli Utility Closed, you can compare the effects of market volatilities on Orchid Island and Gabelli Utility 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 Orchid Island with a short position of Gabelli Utility. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orchid Island and Gabelli Utility.
Diversification Opportunities for Orchid Island and Gabelli Utility
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Orchid and Gabelli is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Orchid Island Capital and Gabelli Utility Closed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gabelli Utility Closed and Orchid Island 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 Orchid Island Capital are associated (or correlated) with Gabelli Utility. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gabelli Utility Closed has no effect on the direction of Orchid Island i.e., Orchid Island and Gabelli Utility go up and down completely randomly.
Pair Corralation between Orchid Island and Gabelli Utility
Considering the 90-day investment horizon Orchid Island Capital is expected to generate 1.2 times more return on investment than Gabelli Utility. However, Orchid Island is 1.2 times more volatile than Gabelli Utility Closed. It trades about 0.05 of its potential returns per unit of risk. Gabelli Utility Closed is currently generating about 0.01 per unit of risk. If you would invest 696.00 in Orchid Island Capital on September 12, 2024 and sell it today you would earn a total of 106.00 from holding Orchid Island Capital or generate 15.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Orchid Island Capital vs. Gabelli Utility Closed
Performance |
| Timeline |
| Orchid Island Capital |
| Gabelli Utility Closed |
Orchid Island and Gabelli Utility Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orchid Island and Gabelli Utility
The main advantage of trading using opposite Orchid Island and Gabelli Utility positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orchid Island position performs unexpectedly, Gabelli Utility 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 Utility will offset losses from the drop in Gabelli Utility's long position.| Orchid Island vs. AGNC Investment Corp | Orchid Island vs. Two Harbors Investments | Orchid Island vs. Invesco Mortgage Capital | Orchid Island vs. Chimera Investment |
| Gabelli Utility vs. Oxford Lane Capital | Gabelli Utility vs. Orchid Island Capital | Gabelli Utility vs. Guggenheim Strategic Opportunities | Gabelli Utility vs. Stone Harbor Emerging |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |