Correlation Between Reaves Utility and Pcm Fund

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

By analyzing existing cross correlation between Reaves Utility If and Pcm Fund, you can compare the effects of market volatilities on Reaves Utility and Pcm Fund 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 Reaves Utility with a short position of Pcm Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Reaves Utility and Pcm Fund.

Diversification Opportunities for Reaves Utility and Pcm Fund

-0.59

Correlation Coefficient

Reaves Utility  Pcm Fund

Excellent diversification

The 3 months correlation between Reaves and Pcm is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Reaves Utility If and Pcm Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pcm Fund and Reaves 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 Reaves Utility If are associated (or correlated) with Pcm Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pcm Fund has no effect on the direction of Reaves Utility i.e., Reaves Utility and Pcm Fund go up and down completely randomly.

Pair Corralation between Reaves Utility and Pcm Fund

Considering the 90-day investment horizon Reaves Utility If is expected to generate 0.61 times more return on investment than Pcm Fund. However, Reaves Utility If is 1.65 times less risky than Pcm Fund. It trades about 0.06 of its potential returns per unit of risk. Pcm Fund is currently generating about -0.1 per unit of risk. If you would invest  3,121  in Reaves Utility If on December 26, 2024 and sell it today you would earn a total of  127.00  from holding Reaves Utility If or generate 4.07% return on investment over 90 days.

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

Reaves Utility If  vs.  Pcm Fund

Reaves Utility If

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Reaves Utility If are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. Despite nearly stable basic indicators, Reaves Utility is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pcm Fund

Risk-Adjusted Performance

Very Weak

Over the last 90 days Pcm Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of conflicting performance in the last few months, the Fund's fundamental indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the fund investors.

Pair Trading with Reaves Utility and Pcm Fund

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

The idea behind Reaves Utility If and Pcm Fund 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.