Correlation Between Expand Energy and Duolingo
Can any of the company-specific risk be diversified away by investing in both Expand Energy and Duolingo 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 Expand Energy and Duolingo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Expand Energy and Duolingo, you can compare the effects of market volatilities on Expand Energy and Duolingo 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 Expand Energy with a short position of Duolingo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Expand Energy and Duolingo.
Diversification Opportunities for Expand Energy and Duolingo
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Expand and Duolingo is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Expand Energy and Duolingo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Duolingo and Expand 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 Expand Energy are associated (or correlated) with Duolingo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Duolingo has no effect on the direction of Expand Energy i.e., Expand Energy and Duolingo go up and down completely randomly.
Pair Corralation between Expand Energy and Duolingo
Assuming the 90 days horizon Expand Energy is expected to generate 0.7 times more return on investment than Duolingo. However, Expand Energy is 1.43 times less risky than Duolingo. It trades about 0.38 of its potential returns per unit of risk. Duolingo is currently generating about 0.09 per unit of risk. If you would invest 8,963 in Expand Energy on October 23, 2024 and sell it today you would earn a total of 1,169 from holding Expand Energy or generate 13.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Expand Energy vs. Duolingo
Performance |
| Timeline |
| Expand Energy |
| Duolingo |
Expand Energy and Duolingo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Expand Energy and Duolingo
The main advantage of trading using opposite Expand Energy and Duolingo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Expand Energy position performs unexpectedly, Duolingo 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 Duolingo will offset losses from the drop in Duolingo's long position.| Expand Energy vs. Amkor Technology | Expand Energy vs. National Beverage Corp | Expand Energy vs. Fomento Economico Mexicano | Expand Energy vs. Radcom |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |