Correlation Between Companhia Energtica and Duke Energy
Can any of the company-specific risk be diversified away by investing in both Companhia Energtica 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 Companhia Energtica and Duke Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Companhia Energtica de and Duke Energy, you can compare the effects of market volatilities on Companhia Energtica 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 Companhia Energtica with a short position of Duke Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Companhia Energtica and Duke Energy.
Diversification Opportunities for Companhia Energtica and Duke Energy
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Companhia and Duke is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Companhia Energtica de and Duke Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Duke Energy and Companhia Energtica 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 Companhia Energtica de 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 Companhia Energtica i.e., Companhia Energtica and Duke Energy go up and down completely randomly.
Pair Corralation between Companhia Energtica and Duke Energy
Assuming the 90 days trading horizon Companhia Energtica de is expected to under-perform the Duke Energy. But the stock apears to be less risky and, when comparing its historical volatility, Companhia Energtica de is 1.05 times less risky than Duke Energy. The stock trades about -0.04 of its potential returns per unit of risk. The Duke Energy is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 65,224 in Duke Energy on September 5, 2024 and sell it today you would earn a total of 3,936 from holding Duke Energy or generate 6.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 90.48% |
| Values | Daily Returns |
Companhia Energtica de vs. Duke Energy
Performance |
| Timeline |
| Companhia Energtica |
| Duke Energy |
Companhia Energtica and Duke Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Companhia Energtica and Duke Energy
The main advantage of trading using opposite Companhia Energtica and Duke Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Companhia Energtica 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.| Companhia Energtica vs. Companhia Energtica de | Companhia Energtica vs. Centrais Eltricas Brasileiras | Companhia Energtica vs. Centrais Eltricas Brasileiras | Companhia Energtica vs. Companhia de Saneamento |
| Duke Energy vs. Transmissora Aliana de | Duke Energy vs. CTEEP Companhia | Duke Energy vs. Companhia Paranaense de | Duke Energy vs. Companhia Energtica de |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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