Correlation Between Equitable Holdings and Duke Energy
Can any of the company-specific risk be diversified away by investing in both Equitable Holdings 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 Equitable Holdings and Duke Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Equitable Holdings and Duke Energy, you can compare the effects of market volatilities on Equitable Holdings 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 Equitable Holdings with a short position of Duke Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Equitable Holdings and Duke Energy.
Diversification Opportunities for Equitable Holdings and Duke Energy
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Equitable and Duke is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Equitable Holdings and Duke Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Duke Energy and Equitable Holdings 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 Equitable Holdings 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 Equitable Holdings i.e., Equitable Holdings and Duke Energy go up and down completely randomly.
Pair Corralation between Equitable Holdings and Duke Energy
Assuming the 90 days trading horizon Equitable Holdings is expected to under-perform the Duke Energy. In addition to that, Equitable Holdings is 2.6 times more volatile than Duke Energy. It trades about -0.08 of its total potential returns per unit of risk. Duke Energy is currently generating about 0.09 per unit of volatility. If you would invest 2,485 in Duke Energy on August 27, 2024 and sell it today you would earn a total of 18.00 from holding Duke Energy or generate 0.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Equitable Holdings vs. Duke Energy
Performance |
| Timeline |
| Equitable Holdings |
| Duke Energy |
Equitable Holdings and Duke Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Equitable Holdings and Duke Energy
The main advantage of trading using opposite Equitable Holdings and Duke Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Equitable Holdings 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.| Equitable Holdings vs. Enstar Group Limited | Equitable Holdings vs. Berkshire Hathaway | Equitable Holdings vs. Athene Holding |
| 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
Other Complementary Tools
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences |