Correlation Between Duke Energy and SENERELECSPGDR REGS
Can any of the company-specific risk be diversified away by investing in both Duke Energy and SENERELECSPGDR REGS 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 SENERELECSPGDR REGS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Duke Energy and SENERELECSPGDR REGS 1, you can compare the effects of market volatilities on Duke Energy and SENERELECSPGDR REGS 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 SENERELECSPGDR REGS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Duke Energy and SENERELECSPGDR REGS.
Diversification Opportunities for Duke Energy and SENERELECSPGDR REGS
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Duke and SENERELECSPGDR is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Duke Energy and SENERELECSPGDR REGS 1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SENERELECSPGDR REGS 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 SENERELECSPGDR REGS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SENERELECSPGDR REGS has no effect on the direction of Duke Energy i.e., Duke Energy and SENERELECSPGDR REGS go up and down completely randomly.
Pair Corralation between Duke Energy and SENERELECSPGDR REGS
Assuming the 90 days trading horizon Duke Energy is expected to generate 0.43 times more return on investment than SENERELECSPGDR REGS. However, Duke Energy is 2.33 times less risky than SENERELECSPGDR REGS. It trades about -0.04 of its potential returns per unit of risk. SENERELECSPGDR REGS 1 is currently generating about -0.08 per unit of risk. If you would invest 10,506 in Duke Energy on September 13, 2024 and sell it today you would lose (106.00) from holding Duke Energy or give up 1.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Duke Energy vs. SENERELECSPGDR REGS 1
Performance |
| Timeline |
| Duke Energy |
| SENERELECSPGDR REGS |
Duke Energy and SENERELECSPGDR REGS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Duke Energy and SENERELECSPGDR REGS
The main advantage of trading using opposite Duke Energy and SENERELECSPGDR REGS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Duke Energy position performs unexpectedly, SENERELECSPGDR REGS 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 SENERELECSPGDR REGS will offset losses from the drop in SENERELECSPGDR REGS'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 |
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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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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