Correlation Between Gabelli Utility and Duke Energy

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

By analyzing existing cross correlation between Gabelli Utility Trust and Duke Energy Corp, you can compare the effects of market volatilities on Gabelli Utility and Duke Energy 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 Duke Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gabelli Utility and Duke Energy.

Diversification Opportunities for Gabelli Utility and Duke Energy

0.73

Correlation Coefficient

Gabelli Utility  Duke Energy

Poor diversification

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

Pair Corralation between Gabelli Utility and Duke Energy

Assuming the 90 days horizon Gabelli Utility is expected to generate 2.68 times less return on investment than Duke Energy. In addition to that, Gabelli Utility is 1.46 times more volatile than Duke Energy Corp. It trades about 0.04 of its total potential returns per unit of risk. Duke Energy Corp is currently generating about 0.15 per unit of volatility. If you would invest  2,363  in Duke Energy Corp on December 25, 2024 and sell it today you would earn a total of  116.00  from holding Duke Energy Corp or generate 4.91% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.33%
Values	Daily Returns

Gabelli Utility Trust  vs.  Duke Energy Corp

Gabelli Utility Trust

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Gabelli Utility Trust are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Gabelli Utility is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Duke Energy Corp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Duke Energy Corp are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong forward-looking signals, Duke Energy is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Gabelli Utility and Duke Energy

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

The idea behind Gabelli Utility Trust and Duke Energy Corp 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.

Check out your portfolio center.

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.