Correlation Between American Beacon and Gabelli Utility
Can any of the company-specific risk be diversified away by investing in both American Beacon and Gabelli Utility 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 American Beacon and Gabelli Utility into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Beacon International and Gabelli Utility Closed, you can compare the effects of market volatilities on American Beacon and Gabelli Utility 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 American Beacon with a short position of Gabelli Utility. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Beacon and Gabelli Utility.
Diversification Opportunities for American Beacon and Gabelli Utility
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between American and Gabelli is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding American Beacon International and Gabelli Utility Closed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gabelli Utility Closed and American Beacon 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 American Beacon International are associated (or correlated) with Gabelli Utility. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gabelli Utility Closed has no effect on the direction of American Beacon i.e., American Beacon and Gabelli Utility go up and down completely randomly.
Pair Corralation between American Beacon and Gabelli Utility
Assuming the 90 days horizon American Beacon International is expected to generate about the same return on investment as Gabelli Utility Closed. But, American Beacon International is 1.21 times less risky than Gabelli Utility. It trades about 0.08 of its potential returns per unit of risk. Gabelli Utility Closed is currently generating about 0.06 per unit of risk. If you would invest 583.00 in Gabelli Utility Closed on August 17, 2025 and sell it today you would earn a total of 19.00 from holding Gabelli Utility Closed or generate 3.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Beacon International vs. Gabelli Utility Closed
Performance |
| Timeline |
| American Beacon Inte |
| Gabelli Utility Closed |
American Beacon and Gabelli Utility Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Beacon and Gabelli Utility
The main advantage of trading using opposite American Beacon and Gabelli Utility positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Beacon position performs unexpectedly, Gabelli Utility 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 Gabelli Utility will offset losses from the drop in Gabelli Utility's long position.| American Beacon vs. American Beacon International | American Beacon vs. American Beacon International | American Beacon vs. American Beacon International | American Beacon vs. Columbia Global Dividend |
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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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