Correlation Between DTE Energy and Public Service

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both DTE Energy and Public Service 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 Public Service into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DTE Energy and Public Service Enterprise, you can compare the effects of market volatilities on DTE Energy and Public Service 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 Public Service. Check out your portfolio center. Please also check ongoing floating volatility patterns of DTE Energy and Public Service.

Diversification Opportunities for DTE Energy and Public Service

DTEPublicDiversified AwayDTEPublicDiversified Away100%
0.08
  Correlation Coefficient

Significant diversification

The 3 months correlation between DTE and Public is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding DTE Energy and Public Service Enterprise in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Public Service Enterprise 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 Public Service. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Public Service Enterprise has no effect on the direction of DTE Energy i.e., DTE Energy and Public Service go up and down completely randomly.

Pair Corralation between DTE Energy and Public Service

Considering the 90-day investment horizon DTE Energy is expected to generate 1.57 times less return on investment than Public Service. But when comparing it to its historical volatility, DTE Energy is 1.05 times less risky than Public Service. It trades about 0.04 of its potential returns per unit of risk. Public Service Enterprise is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  5,957  in Public Service Enterprise on November 27, 2024 and sell it today you would earn a total of  2,479  from holding Public Service Enterprise or generate 41.61% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

DTE Energy  vs.  Public Service Enterprise

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -505
JavaScript chart by amCharts 3.21.15DTE PEG
       Timeline  
DTE Energy 

Risk-Adjusted Performance

OK

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in DTE Energy are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, DTE Energy may actually be approaching a critical reversion point that can send shares even higher in March 2025.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb116118120122124126128130132
Public Service Enterprise 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Public Service Enterprise has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's technical and fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb8082848688909294

DTE Energy and Public Service Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-3.23-2.42-1.61-0.80.00.861.742.623.5 0.050.100.150.200.250.300.35
JavaScript chart by amCharts 3.21.15DTE PEG
       Returns  

Pair Trading with DTE Energy and Public Service

The main advantage of trading using opposite DTE Energy and Public Service positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DTE Energy position performs unexpectedly, Public Service 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 Public Service will offset losses from the drop in Public Service's long position.
The idea behind DTE Energy and Public Service Enterprise pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.

Other Complementary Tools

Stock Screener
Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook.
Analyst Advice
Analyst recommendations and target price estimates broken down by several categories
Alpha Finder
Use alpha and beta coefficients to find investment opportunities after accounting for the risk
Fundamentals Comparison
Compare fundamentals across multiple equities to find investing opportunities
Sign In To Macroaxis
Sign in to explore Macroaxis' wealth optimization platform and fintech modules