Correlation Between Centrais Eltricas and Duke Energy
Can any of the company-specific risk be diversified away by investing in both Centrais Eltricas and Duke Energy 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 Centrais Eltricas and Duke Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Centrais Eltricas Brasileiras and Duke Energy, you can compare the effects of market volatilities on Centrais Eltricas and Duke Energy 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 Centrais Eltricas with a short position of Duke Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centrais Eltricas and Duke Energy.
Diversification Opportunities for Centrais Eltricas and Duke Energy
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Centrais and Duke is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Centrais Eltricas Brasileiras and Duke Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Duke Energy and Centrais Eltricas 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 Centrais Eltricas Brasileiras are associated (or correlated) with Duke Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Duke Energy has no effect on the direction of Centrais Eltricas i.e., Centrais Eltricas and Duke Energy go up and down completely randomly.
Pair Corralation between Centrais Eltricas and Duke Energy
Assuming the 90 days trading horizon Centrais Eltricas Brasileiras is expected to generate 2.38 times more return on investment than Duke Energy. However, Centrais Eltricas is 2.38 times more volatile than Duke Energy. It trades about 0.06 of its potential returns per unit of risk. Duke Energy is currently generating about -0.01 per unit of risk. If you would invest 3,805 in Centrais Eltricas Brasileiras on October 21, 2024 and sell it today you would earn a total of 73.00 from holding Centrais Eltricas Brasileiras or generate 1.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Centrais Eltricas Brasileiras vs. Duke Energy
Performance |
| Timeline |
| Centrais Eltricas |
| Duke Energy |
Centrais Eltricas and Duke Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Centrais Eltricas and Duke Energy
The main advantage of trading using opposite Centrais Eltricas and Duke Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centrais Eltricas position performs unexpectedly, Duke Energy 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 Duke Energy will offset losses from the drop in Duke Energy's long position.| Centrais Eltricas vs. Centrais Eltricas Brasileiras | Centrais Eltricas vs. Companhia Energtica de | Centrais Eltricas vs. Companhia Paranaense de | Centrais Eltricas vs. Companhia de Saneamento |
| Duke Energy vs. Westinghouse Air Brake | Duke Energy vs. DXC Technology | Duke Energy vs. Alaska Air Group, | Duke Energy vs. Pentair plc |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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