Correlation Between Capital One and Duke Energy
Can any of the company-specific risk be diversified away by investing in both Capital One 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 Capital One and Duke Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capital One Financial and Duke Energy, you can compare the effects of market volatilities on Capital One 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 Capital One with a short position of Duke Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capital One and Duke Energy.
Diversification Opportunities for Capital One and Duke Energy
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Capital and Duke is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Capital One Financial and Duke Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Duke Energy and Capital One 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 Capital One Financial 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 Capital One i.e., Capital One and Duke Energy go up and down completely randomly.
Pair Corralation between Capital One and Duke Energy
Assuming the 90 days trading horizon Capital One Financial is expected to generate 0.92 times more return on investment than Duke Energy. However, Capital One Financial is 1.09 times less risky than Duke Energy. It trades about 0.1 of its potential returns per unit of risk. Duke Energy is currently generating about 0.04 per unit of risk. If you would invest 23,150 in Capital One Financial on September 3, 2024 and sell it today you would earn a total of 35,503 from holding Capital One Financial or generate 153.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 82.88% |
| Values | Daily Returns |
Capital One Financial vs. Duke Energy
Performance |
| Timeline |
| Capital One Financial |
| Duke Energy |
Capital One and Duke Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capital One and Duke Energy
The main advantage of trading using opposite Capital One and Duke Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capital One 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.| Capital One vs. Deutsche Bank Aktiengesellschaft | Capital One vs. HDFC Bank Limited | Capital One vs. Southwest Airlines Co | Capital One vs. Iron Mountain Incorporated |
| Duke Energy vs. Deutsche Bank Aktiengesellschaft | Duke Energy vs. Bemobi Mobile Tech | Duke Energy vs. Credit Acceptance | Duke Energy vs. GP Investments |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device |