Correlation Between Duke Energy and CK Infrastructure
Can any of the company-specific risk be diversified away by investing in both Duke Energy and CK Infrastructure 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 CK Infrastructure into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Duke Energy and CK Infrastructure Holdings, you can compare the effects of market volatilities on Duke Energy and CK Infrastructure 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 CK Infrastructure. Check out your portfolio center. Please also check ongoing floating volatility patterns of Duke Energy and CK Infrastructure.
Diversification Opportunities for Duke Energy and CK Infrastructure
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Duke and CHH is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Duke Energy and CK Infrastructure Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CK Infrastructure 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 CK Infrastructure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CK Infrastructure has no effect on the direction of Duke Energy i.e., Duke Energy and CK Infrastructure go up and down completely randomly.
Pair Corralation between Duke Energy and CK Infrastructure
Assuming the 90 days trading horizon Duke Energy is expected to generate 0.48 times more return on investment than CK Infrastructure. However, Duke Energy is 2.06 times less risky than CK Infrastructure. It trades about 0.01 of its potential returns per unit of risk. CK Infrastructure Holdings is currently generating about -0.02 per unit of risk. If you would invest 10,388 in Duke Energy on September 13, 2024 and sell it today you would earn a total of 74.00 from holding Duke Energy or generate 0.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Duke Energy vs. CK Infrastructure Holdings
Performance |
| Timeline |
| Duke Energy |
| CK Infrastructure |
Duke Energy and CK Infrastructure Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Duke Energy and CK Infrastructure
The main advantage of trading using opposite Duke Energy and CK Infrastructure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Duke Energy position performs unexpectedly, CK Infrastructure 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 CK Infrastructure will offset losses from the drop in CK Infrastructure'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 |
| CK Infrastructure vs. INDO RAMA SYNTHETIC | CK Infrastructure vs. STMICROELECTRONICS | CK Infrastructure vs. Eastman Chemical | CK Infrastructure vs. Arrow Electronics |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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