Correlation Between Astar and Duke Energy
Can any of the company-specific risk be diversified away by investing in both Astar 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 Astar and Duke Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Astar and Duke Energy, you can compare the effects of market volatilities on Astar 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 Astar with a short position of Duke Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astar and Duke Energy.
Diversification Opportunities for Astar and Duke Energy
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Astar and Duke is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Astar and Duke Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Duke Energy and Astar 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 Astar 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 has no effect on the direction of Astar i.e., Astar and Duke Energy go up and down completely randomly.
Pair Corralation between Astar and Duke Energy
Assuming the 90 days trading horizon Astar is expected to generate 5.51 times more return on investment than Duke Energy. However, Astar is 5.51 times more volatile than Duke Energy. It trades about 0.05 of its potential returns per unit of risk. Duke Energy is currently generating about 0.11 per unit of risk. If you would invest 6.20 in Astar on October 20, 2024 and sell it today you would earn a total of 0.16 from holding Astar or generate 2.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 90.91% |
| Values | Daily Returns |
Astar vs. Duke Energy
Performance |
| Timeline |
| Astar |
| Duke Energy |
Astar and Duke Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astar and Duke Energy
The main advantage of trading using opposite Astar and Duke Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astar 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 Astar and Duke Energy 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.| Duke Energy vs. Consolidated Edison | Duke Energy vs. Dominion Energy | Duke Energy vs. American Electric Power | Duke Energy vs. Nextera Energy |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
Other Complementary Tools
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world |