Correlation Between Duke Energy and El Paso
Can any of the company-specific risk be diversified away by investing in both Duke Energy and El Paso 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 El Paso into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Duke Energy and El Paso Energy, you can compare the effects of market volatilities on Duke Energy and El Paso 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 El Paso. Check out your portfolio center. Please also check ongoing floating volatility patterns of Duke Energy and El Paso.
Diversification Opportunities for Duke Energy and El Paso
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Duke and EP-PC is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Duke Energy and El Paso Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on El Paso Energy 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 El Paso. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of El Paso Energy has no effect on the direction of Duke Energy i.e., Duke Energy and El Paso go up and down completely randomly.
Pair Corralation between Duke Energy and El Paso
Assuming the 90 days trading horizon Duke Energy is expected to generate 1.78 times less return on investment than El Paso. In addition to that, Duke Energy is 1.12 times more volatile than El Paso Energy. It trades about 0.03 of its total potential returns per unit of risk. El Paso Energy is currently generating about 0.07 per unit of volatility. If you would invest 4,217 in El Paso Energy on August 24, 2024 and sell it today you would earn a total of 625.00 from holding El Paso Energy or generate 14.82% 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. El Paso Energy
Performance |
| Timeline |
| Duke Energy |
| El Paso Energy |
Duke Energy and El Paso Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Duke Energy and El Paso
The main advantage of trading using opposite Duke Energy and El Paso positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Duke Energy position performs unexpectedly, El Paso 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 El Paso will offset losses from the drop in El Paso's long position.| 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |