Correlation Between Duke Energy and Alupar Investimento
Can any of the company-specific risk be diversified away by investing in both Duke Energy and Alupar Investimento 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 Alupar Investimento into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Duke Energy and Alupar Investimento SA, you can compare the effects of market volatilities on Duke Energy and Alupar Investimento 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 Alupar Investimento. Check out your portfolio center. Please also check ongoing floating volatility patterns of Duke Energy and Alupar Investimento.
Diversification Opportunities for Duke Energy and Alupar Investimento
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Duke and Alupar is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Duke Energy and Alupar Investimento SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alupar Investimento 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 Alupar Investimento. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alupar Investimento has no effect on the direction of Duke Energy i.e., Duke Energy and Alupar Investimento go up and down completely randomly.
Pair Corralation between Duke Energy and Alupar Investimento
Assuming the 90 days trading horizon Duke Energy is expected to generate 1.99 times more return on investment than Alupar Investimento. However, Duke Energy is 1.99 times more volatile than Alupar Investimento SA. It trades about 0.1 of its potential returns per unit of risk. Alupar Investimento SA is currently generating about -0.08 per unit of risk. If you would invest 66,488 in Duke Energy on August 29, 2024 and sell it today you would earn a total of 3,008 from holding Duke Energy or generate 4.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.48% |
| Values | Daily Returns |
Duke Energy vs. Alupar Investimento SA
Performance |
| Timeline |
| Duke Energy |
| Alupar Investimento |
Duke Energy and Alupar Investimento Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Duke Energy and Alupar Investimento
The main advantage of trading using opposite Duke Energy and Alupar Investimento positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Duke Energy position performs unexpectedly, Alupar Investimento 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 Alupar Investimento will offset losses from the drop in Alupar Investimento's long position.| Duke Energy vs. Centrais Eltricas Brasileiras | Duke Energy vs. Centrais Eltricas Brasileiras | Duke Energy vs. Energisa SA | Duke Energy vs. Energisa Mato Grosso |
| Alupar Investimento vs. Lloyds Banking Group | Alupar Investimento vs. Prudential Financial | Alupar Investimento vs. Deutsche Bank Aktiengesellschaft | Alupar Investimento vs. Sumitomo Mitsui Financial |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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