Correlation Between DTE Energy and Duke Energy
Can any of the company-specific risk be diversified away by investing in both DTE Energy 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 DTE Energy and Duke Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DTE Energy and Duke Energy, you can compare the effects of market volatilities on DTE Energy 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 DTE Energy with a short position of Duke Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of DTE Energy and Duke Energy.
Diversification Opportunities for DTE Energy and Duke Energy
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between DTE and Duke is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding DTE Energy and Duke Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Duke Energy and DTE 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 DTE Energy 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 DTE Energy i.e., DTE Energy and Duke Energy go up and down completely randomly.
Pair Corralation between DTE Energy and Duke Energy
Considering the 90-day investment horizon DTE Energy is expected to under-perform the Duke Energy. In addition to that, DTE Energy is 2.01 times more volatile than Duke Energy. It trades about -0.31 of its total potential returns per unit of risk. Duke Energy is currently generating about 0.07 per unit of volatility. If you would invest 2,479 in Duke Energy on August 24, 2024 and sell it today you would earn a total of 14.00 from holding Duke Energy or generate 0.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DTE Energy vs. Duke Energy
Performance |
| Timeline |
| DTE Energy |
| Duke Energy |
DTE Energy and Duke Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DTE Energy and Duke Energy
The main advantage of trading using opposite DTE Energy and Duke Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DTE Energy 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.| DTE Energy vs. Southern Company Series | DTE Energy vs. Southern Co | DTE Energy vs. DTE Energy Co | DTE Energy vs. Affiliated Managers Group, |
| Duke Energy vs. Centrais Eltricas Brasileiras | Duke Energy vs. Nextera Energy | Duke Energy vs. Consumers Energy | Duke Energy vs. CMS Energy |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| 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 Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |