Correlation Between Gabelli Utility and Flaherty Crumrine

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

Diversification Opportunities for Gabelli Utility and Flaherty Crumrine

-0.73

Correlation Coefficient

Gabelli Utility  Flaherty Crumrine

Pay attention - limited upside

The 3 months correlation between Gabelli and Flaherty is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Gabelli Utility Closed and Flaherty Crumrine Preferred in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flaherty Crumrine 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 Flaherty Crumrine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flaherty Crumrine has no effect on the direction of Gabelli Utility i.e., Gabelli Utility and Flaherty Crumrine go up and down completely randomly.

Pair Corralation between Gabelli Utility and Flaherty Crumrine

Considering the 90-day investment horizon Gabelli Utility Closed is expected to generate 2.11 times more return on investment than Flaherty Crumrine. However, Gabelli Utility is 2.11 times more volatile than Flaherty Crumrine Preferred. It trades about 0.21 of its potential returns per unit of risk. Flaherty Crumrine Preferred is currently generating about 0.06 per unit of risk. If you would invest  497.00  in Gabelli Utility Closed on September 4, 2024 and sell it today you would earn a total of  25.00  from holding Gabelli Utility Closed or generate 5.03% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.24%
Values	Daily Returns

Gabelli Utility Closed  vs.  Flaherty Crumrine Preferred

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 weak 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.

Flaherty Crumrine

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Flaherty Crumrine Preferred are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of very healthy technical and fundamental indicators, Flaherty Crumrine is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Gabelli Utility and Flaherty Crumrine

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

The idea behind Gabelli Utility Closed and Flaherty Crumrine Preferred 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.