Correlation Between Stone Harbor and Gabelli Utility

Can any of the company-specific risk be diversified away by investing in both Stone Harbor 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 Stone Harbor and Gabelli Utility into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Stone Harbor Emerging and Gabelli Utility Closed, you can compare the effects of market volatilities on Stone Harbor 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 Stone Harbor with a short position of Gabelli Utility. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stone Harbor and Gabelli Utility.

Diversification Opportunities for Stone Harbor and Gabelli Utility

-0.04

Correlation Coefficient

Stone Harbor  Gabelli Utility

Good diversification

The 3 months correlation between Stone and Gabelli is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Stone Harbor Emerging 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 Stone Harbor 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 Stone Harbor Emerging 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 Stone Harbor i.e., Stone Harbor and Gabelli Utility go up and down completely randomly.

Pair Corralation between Stone Harbor and Gabelli Utility

Considering the 90-day investment horizon Stone Harbor Emerging is expected to under-perform the Gabelli Utility. But the fund apears to be less risky and, when comparing its historical volatility, Stone Harbor Emerging is 1.0 times less risky than Gabelli Utility. The fund trades about -0.01 of its potential returns per unit of risk. The Gabelli Utility Closed is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest  501.00  in Gabelli Utility Closed on September 12, 2024 and sell it today you would earn a total of  40.00  from holding Gabelli Utility Closed or generate 7.98% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Stone Harbor Emerging  vs.  Gabelli Utility Closed

Stone Harbor Emerging

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Stone Harbor Emerging has generated negative risk-adjusted returns adding no value to fund investors. Despite nearly stable fundamental indicators, Stone Harbor is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Gabelli Utility Closed

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Gabelli Utility Closed are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of comparatively stable basic indicators, Gabelli Utility is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Stone Harbor and Gabelli Utility

The main advantage of trading using opposite Stone Harbor and Gabelli Utility positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stone Harbor 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.

The idea behind Stone Harbor Emerging and Gabelli Utility Closed pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Transaction History module to view history of all your transactions and understand their impact on performance.