Correlation Between Duke Energy and INNOVATEC SPA
Can any of the company-specific risk be diversified away by investing in both Duke Energy and INNOVATEC SPA 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 Duke Energy and INNOVATEC SPA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Duke Energy and INNOVATEC SPA, you can compare the effects of market volatilities on Duke Energy and INNOVATEC SPA 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 Duke Energy with a short position of INNOVATEC SPA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Duke Energy and INNOVATEC SPA.
Diversification Opportunities for Duke Energy and INNOVATEC SPA
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Duke and INNOVATEC is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Duke Energy and INNOVATEC SPA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INNOVATEC SPA and Duke Energy 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 Duke Energy are associated (or correlated) with INNOVATEC SPA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INNOVATEC SPA has no effect on the direction of Duke Energy i.e., Duke Energy and INNOVATEC SPA go up and down completely randomly.
Pair Corralation between Duke Energy and INNOVATEC SPA
Assuming the 90 days trading horizon Duke Energy is expected to under-perform the INNOVATEC SPA. But the stock apears to be less risky and, when comparing its historical volatility, Duke Energy is 5.5 times less risky than INNOVATEC SPA. The stock trades about -0.04 of its potential returns per unit of risk. The INNOVATEC SPA is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 77.00 in INNOVATEC SPA on September 13, 2024 and sell it today you would earn a total of 19.00 from holding INNOVATEC SPA or generate 24.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Duke Energy vs. INNOVATEC SPA
Performance |
| Timeline |
| Duke Energy |
| INNOVATEC SPA |
Duke Energy and INNOVATEC SPA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Duke Energy and INNOVATEC SPA
The main advantage of trading using opposite Duke Energy and INNOVATEC SPA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Duke Energy position performs unexpectedly, INNOVATEC SPA 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 INNOVATEC SPA will offset losses from the drop in INNOVATEC SPA's long position.| Duke Energy vs. WEC Energy Group | Duke Energy vs. ENDESA ADR 12 | Duke Energy vs. CMS Energy | Duke Energy vs. Terna Rete |
| INNOVATEC SPA vs. ITALIAN WINE BRANDS | INNOVATEC SPA vs. Amkor Technology | INNOVATEC SPA vs. LION ONE METALS | INNOVATEC SPA vs. SOFI TECHNOLOGIES |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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