Correlation Between Spire and The Gabelli

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

By analyzing existing cross correlation between Spire Inc and The Gabelli Utilities, you can compare the effects of market volatilities on Spire and The Gabelli 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 Spire with a short position of The Gabelli. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spire and The Gabelli.

Diversification Opportunities for Spire and The Gabelli

0.79

Correlation Coefficient

Spire  The Gabelli

Poor diversification

The 3 months correlation between Spire and The is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Spire Inc and The Gabelli Utilities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gabelli Utilities and Spire 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 Spire Inc are associated (or correlated) with The Gabelli. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gabelli Utilities has no effect on the direction of Spire i.e., Spire and The Gabelli go up and down completely randomly.

Pair Corralation between Spire and The Gabelli

Allowing for the 90-day total investment horizon Spire Inc is expected to generate 1.29 times more return on investment than The Gabelli. However, Spire is 1.29 times more volatile than The Gabelli Utilities. It trades about 0.18 of its potential returns per unit of risk. The Gabelli Utilities is currently generating about 0.02 per unit of risk. If you would invest  6,683  in Spire Inc on December 26, 2024 and sell it today you would earn a total of  995.00  from holding Spire Inc or generate 14.89% return on investment over 90 days.

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

Spire Inc  vs.  The Gabelli Utilities

Spire Inc

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Spire Inc are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating basic indicators, Spire reported solid returns over the last few months and may actually be approaching a breakup point.

Gabelli Utilities

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in The Gabelli Utilities are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, The Gabelli is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Spire and The Gabelli

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

The idea behind Spire Inc and The Gabelli Utilities 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.