Correlation Between Gabelli Utility and Blackrock Muni

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

Diversification Opportunities for Gabelli Utility and Blackrock Muni

0.17

Correlation Coefficient

Gabelli Utility  Blackrock Muni

Average diversification

The 3 months correlation between Gabelli and Blackrock is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding The Gabelli Utility and Blackrock Muni Intermediate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Muni Inter 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 Blackrock Muni. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Muni Inter has no effect on the direction of Gabelli Utility i.e., Gabelli Utility and Blackrock Muni go up and down completely randomly.

Pair Corralation between Gabelli Utility and Blackrock Muni

Assuming the 90 days trading horizon The Gabelli Utility is expected to generate 0.99 times more return on investment than Blackrock Muni. However, The Gabelli Utility is 1.01 times less risky than Blackrock Muni. It trades about 0.0 of its potential returns per unit of risk. Blackrock Muni Intermediate is currently generating about -0.05 per unit of risk. If you would invest  2,446  in The Gabelli Utility on October 5, 2024 and sell it today you would lose (6.00) from holding The Gabelli Utility or give up 0.25% of portfolio value over 90 days.

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

The Gabelli Utility  vs.  Blackrock Muni Intermediate

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.

Blackrock Muni Inter

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Blackrock Muni Intermediate has generated negative risk-adjusted returns adding no value to fund investors. Despite fairly strong basic indicators, Blackrock Muni is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Gabelli Utility and Blackrock Muni

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

The idea behind The Gabelli Utility and Blackrock Muni Intermediate 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.