Correlation Between Global X and Duke Energy
Can any of the company-specific risk be diversified away by investing in both Global X 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 Global X and Duke Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global X Funds and Duke Energy, you can compare the effects of market volatilities on Global X 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 Global X with a short position of Duke Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and Duke Energy.
Diversification Opportunities for Global X and Duke Energy
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Global and Duke is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Global X Funds and Duke Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Duke Energy and Global X 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 Global X Funds 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 Global X i.e., Global X and Duke Energy go up and down completely randomly.
Pair Corralation between Global X and Duke Energy
Assuming the 90 days trading horizon Global X Funds is expected to generate 0.7 times more return on investment than Duke Energy. However, Global X Funds is 1.42 times less risky than Duke Energy. It trades about 0.23 of its potential returns per unit of risk. Duke Energy is currently generating about 0.03 per unit of risk. If you would invest 4,188 in Global X Funds on September 12, 2024 and sell it today you would earn a total of 862.00 from holding Global X Funds or generate 20.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Global X Funds vs. Duke Energy
Performance |
| Timeline |
| Global X Funds |
| Duke Energy |
Global X and Duke Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and Duke Energy
The main advantage of trading using opposite Global X and Duke Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X 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.| Global X vs. Taiwan Semiconductor Manufacturing | Global X vs. Apple Inc | Global X vs. Alibaba Group Holding | Global X vs. Microsoft |
| Duke Energy vs. United Rentals | Duke Energy vs. Bemobi Mobile Tech | Duke Energy vs. Autohome | Duke Energy vs. Take Two Interactive Software |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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