Correlation Between Gabelli Utility and Mexico Equity

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

Diversification Opportunities for Gabelli Utility and Mexico Equity

0.47

Correlation Coefficient

Gabelli Utility  Mexico Equity

Very weak diversification

The 3 months correlation between Gabelli and Mexico is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Gabelli Utility Closed and Mexico Equity And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mexico Equity And 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 Mexico Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mexico Equity And has no effect on the direction of Gabelli Utility i.e., Gabelli Utility and Mexico Equity go up and down completely randomly.

Pair Corralation between Gabelli Utility and Mexico Equity

Considering the 90-day investment horizon Gabelli Utility is expected to generate 1.23 times less return on investment than Mexico Equity. But when comparing it to its historical volatility, Gabelli Utility Closed is 1.27 times less risky than Mexico Equity. It trades about 0.11 of its potential returns per unit of risk. Mexico Equity And is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  819.00  in Mexico Equity And on December 27, 2024 and sell it today you would earn a total of  67.00  from holding Mexico Equity And or generate 8.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.36%
Values	Daily Returns

Gabelli Utility Closed  vs.  Mexico Equity And

Gabelli Utility Closed

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Gabelli Utility Closed are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of comparatively abnormal basic indicators, Gabelli Utility may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Mexico Equity And

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Mexico Equity And are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of rather fragile basic indicators, Mexico Equity may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Gabelli Utility and Mexico Equity

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

The idea behind Gabelli Utility Closed and Mexico Equity And 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.