Do Utility Stocks Provide Exposure To Bond Markets?

This study examines the relationship between utility stock returns and various bond or interest rate index returns. In contrast to the S&P 500 index, utility stocks show a positive relationship to bond returns. Utility stocks also are more correlated with corporate bond returns than the stock in...

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Bibliographic Details
Published in:Journal of business & economics research (Littleton, Colo.) Colo.), 2009-12, Vol.7 (12), p.25
Main Authors: Bayer, Carol, Ciccone, Stephen J
Format: Article
Language:English
Subjects:
Bond markets
Bonds
Capital gains
Corporate bonds
Correlation analysis
Dividends
Equity
Federal funding
Federal funds rate
Federal Reserve monetary policy
Inflation
Interest rates
Investments
Prices
Public utilities
Rates of return
Regulated industries
Securities markets
Stochastic models
Stock exchanges
Studies
Time series
Treasuries
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Summary:This study examines the relationship between utility stock returns and various bond or interest rate index returns. In contrast to the S&P 500 index, utility stocks show a positive relationship to bond returns. Utility stocks also are more correlated with corporate bond returns than the stock indexes. Overall, utility stocks are considered an excellent diversification tool. The upside of the stock market can be captured, but with less downside risk. [PUBLICATION ABSTRACT]
ISSN:1542-4448