Correlation Between Gabelli Utility and Gabelli Global

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

By analyzing existing cross correlation between Gabelli Utility Closed and Gabelli Global Small, you can compare the effects of market volatilities on Gabelli Utility and Gabelli Global 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 Gabelli Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gabelli Utility and Gabelli Global.

Diversification Opportunities for Gabelli Utility and Gabelli Global

-0.51

Correlation Coefficient

Gabelli Utility  Gabelli Global

Excellent diversification

The 3 months correlation between Gabelli and Gabelli is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Gabelli Utility Closed and Gabelli Global Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gabelli Global Small 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 Gabelli Utility Closed are associated (or correlated) with Gabelli Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gabelli Global Small has no effect on the direction of Gabelli Utility i.e., Gabelli Utility and Gabelli Global go up and down completely randomly.

Pair Corralation between Gabelli Utility and Gabelli Global

Considering the 90-day investment horizon Gabelli Utility Closed is expected to under-perform the Gabelli Global. In addition to that, Gabelli Utility is 1.74 times more volatile than Gabelli Global Small. It trades about -0.13 of its total potential returns per unit of risk. Gabelli Global Small is currently generating about 0.19 per unit of volatility. If you would invest  1,179  in Gabelli Global Small on August 31, 2024 and sell it today you would earn a total of  120.00  from holding Gabelli Global Small or generate 10.18% return on investment over 90 days.

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

Gabelli Utility Closed  vs.  Gabelli Global Small

Gabelli Utility Closed

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gabelli Utility Closed has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest inconsistent performance, the Fund's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the fund private investors.

Gabelli Global Small

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Gabelli Global Small are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent technical and fundamental indicators, Gabelli Global may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with Gabelli Utility and Gabelli Global

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

The idea behind Gabelli Utility Closed and Gabelli Global Small 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.