Correlation Between Gabelli Utility and Adams Diversified

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

Diversification Opportunities for Gabelli Utility and Adams Diversified

-0.53

Correlation Coefficient

Gabelli Utility  Adams Diversified

Excellent diversification

The 3 months correlation between Gabelli and Adams is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Gabelli Utility Closed and Adams Diversified Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adams Diversified Equity 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 Adams Diversified. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adams Diversified Equity has no effect on the direction of Gabelli Utility i.e., Gabelli Utility and Adams Diversified go up and down completely randomly.

Pair Corralation between Gabelli Utility and Adams Diversified

Considering the 90-day investment horizon Gabelli Utility Closed is expected to generate 1.8 times more return on investment than Adams Diversified. However, Gabelli Utility is 1.8 times more volatile than Adams Diversified Equity. It trades about 0.0 of its potential returns per unit of risk. Adams Diversified Equity is currently generating about -0.04 per unit of risk. If you would invest  538.00  in Gabelli Utility Closed on October 10, 2024 and sell it today you would lose (2.00) from holding Gabelli Utility Closed or give up 0.37% of portfolio value over 90 days.

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

Gabelli Utility Closed  vs.  Adams Diversified Equity

Gabelli Utility Closed

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Gabelli Utility Closed are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of comparatively stable basic indicators, Gabelli Utility is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Adams Diversified Equity

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Adams Diversified Equity has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Adams Diversified is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Gabelli Utility and Adams Diversified

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

The idea behind Gabelli Utility Closed and Adams Diversified Equity 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.