Correlation Between Duke Energy and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Duke Energy and Dow Jones 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 Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Duke Energy and Dow Jones Industrial, you can compare the effects of market volatilities on Duke Energy and Dow Jones 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 Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Duke Energy and Dow Jones.
Diversification Opportunities for Duke Energy and Dow Jones
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Duke and Dow is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Duke Energy and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial 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 Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Duke Energy i.e., Duke Energy and Dow Jones go up and down completely randomly.
Pair Corralation between Duke Energy and Dow Jones
Assuming the 90 days trading horizon Duke Energy is expected to generate 2.91 times more return on investment than Dow Jones. However, Duke Energy is 2.91 times more volatile than Dow Jones Industrial. It trades about 0.15 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.34 per unit of risk. If you would invest 65,949 in Duke Energy on September 2, 2024 and sell it today you would earn a total of 4,700 from holding Duke Energy or generate 7.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 85.71% |
| Values | Daily Returns |
Duke Energy vs. Dow Jones Industrial
Performance |
| Timeline |
Duke Energy and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Duke Energy
Pair trading matchups for Duke Energy
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Duke Energy and Dow Jones
The main advantage of trading using opposite Duke Energy and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Duke Energy position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Duke Energy vs. Capital One Financial | Duke Energy vs. Autohome | Duke Energy vs. Waste Management | Duke Energy vs. STMicroelectronics NV |
| Dow Jones vs. Dream Finders Homes | Dow Jones vs. GEN Restaurant Group, | Dow Jones vs. National Beverage Corp | Dow Jones vs. BJs Restaurants |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |