Correlation Between Gabelli Utility and Gladstone Commercial

Can any of the company-specific risk be diversified away by investing in both Gabelli Utility and Gladstone Commercial 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 Gladstone Commercial 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 Gladstone Commercial Corp, you can compare the effects of market volatilities on Gabelli Utility and Gladstone Commercial 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 Gladstone Commercial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gabelli Utility and Gladstone Commercial.

Diversification Opportunities for Gabelli Utility and Gladstone Commercial

-0.35

Correlation Coefficient

Gabelli Utility  Gladstone Commercial

Very good diversification

The 3 months correlation between Gabelli and Gladstone is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding The Gabelli Utility and Gladstone Commercial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gladstone Commercial Corp 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 Gladstone Commercial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gladstone Commercial Corp has no effect on the direction of Gabelli Utility i.e., Gabelli Utility and Gladstone Commercial go up and down completely randomly.

Pair Corralation between Gabelli Utility and Gladstone Commercial

Assuming the 90 days trading horizon Gabelli Utility is expected to generate 11.13 times less return on investment than Gladstone Commercial. But when comparing it to its historical volatility, The Gabelli Utility is 1.27 times less risky than Gladstone Commercial. It trades about 0.01 of its potential returns per unit of risk. Gladstone Commercial Corp is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  2,265  in Gladstone Commercial Corp on September 16, 2024 and sell it today you would earn a total of  60.00  from holding Gladstone Commercial Corp or generate 2.65% 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.  Gladstone Commercial Corp

Gabelli Utility

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days The Gabelli Utility has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Gabelli Utility is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Gladstone Commercial Corp

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Gladstone Commercial Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental indicators, Gladstone Commercial is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Gabelli Utility and Gladstone Commercial

The main advantage of trading using opposite Gabelli Utility and Gladstone Commercial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gabelli Utility position performs unexpectedly, Gladstone Commercial 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 Gladstone Commercial will offset losses from the drop in Gladstone Commercial's long position.

The idea behind The Gabelli Utility and Gladstone Commercial Corp 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.

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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.