Correlation Between Duke Energy and Transmissora Aliana
Can any of the company-specific risk be diversified away by investing in both Duke Energy and Transmissora Aliana 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 Transmissora Aliana into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Duke Energy and Transmissora Aliana de, you can compare the effects of market volatilities on Duke Energy and Transmissora Aliana 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 Transmissora Aliana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Duke Energy and Transmissora Aliana.
Diversification Opportunities for Duke Energy and Transmissora Aliana
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Duke and Transmissora is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Duke Energy and Transmissora Aliana de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transmissora Aliana 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 Transmissora Aliana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transmissora Aliana has no effect on the direction of Duke Energy i.e., Duke Energy and Transmissora Aliana go up and down completely randomly.
Pair Corralation between Duke Energy and Transmissora Aliana
Assuming the 90 days trading horizon Duke Energy is expected to generate 1.61 times more return on investment than Transmissora Aliana. However, Duke Energy is 1.61 times more volatile than Transmissora Aliana de. It trades about 0.04 of its potential returns per unit of risk. Transmissora Aliana de is currently generating about 0.03 per unit of risk. If you would invest 54,680 in Duke Energy on September 5, 2024 and sell it today you would earn a total of 14,480 from holding Duke Energy or generate 26.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 82.6% |
| Values | Daily Returns |
Duke Energy vs. Transmissora Aliana de
Performance |
| Timeline |
| Duke Energy |
| Transmissora Aliana |
Duke Energy and Transmissora Aliana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Duke Energy and Transmissora Aliana
The main advantage of trading using opposite Duke Energy and Transmissora Aliana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Duke Energy position performs unexpectedly, Transmissora Aliana 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 Transmissora Aliana will offset losses from the drop in Transmissora Aliana's long position.| Duke Energy vs. Transmissora Aliana de | Duke Energy vs. CTEEP Companhia | Duke Energy vs. Companhia Paranaense de | Duke Energy vs. Companhia Energtica de |
| Transmissora Aliana vs. Transmissora Aliana de | Transmissora Aliana vs. Klabin SA | Transmissora Aliana vs. Companhia de Saneamento | Transmissora Aliana vs. Transmissora Aliana de |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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