Correlation Between Iron Mountain and Duke Energy
Can any of the company-specific risk be diversified away by investing in both Iron Mountain 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 Iron Mountain and Duke Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Iron Mountain Incorporated and Duke Energy, you can compare the effects of market volatilities on Iron Mountain 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 Iron Mountain with a short position of Duke Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Iron Mountain and Duke Energy.
Diversification Opportunities for Iron Mountain and Duke Energy
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Iron and Duke is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Iron Mountain Incorporated and Duke Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Duke Energy and Iron Mountain 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 Iron Mountain Incorporated 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 Iron Mountain i.e., Iron Mountain and Duke Energy go up and down completely randomly.
Pair Corralation between Iron Mountain and Duke Energy
Assuming the 90 days trading horizon Iron Mountain Incorporated is expected to generate 1.11 times more return on investment than Duke Energy. However, Iron Mountain is 1.11 times more volatile than Duke Energy. It trades about 0.13 of its potential returns per unit of risk. Duke Energy is currently generating about 0.04 per unit of risk. If you would invest 26,054 in Iron Mountain Incorporated on September 14, 2024 and sell it today you would earn a total of 41,702 from holding Iron Mountain Incorporated or generate 160.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 80.83% |
| Values | Daily Returns |
Iron Mountain Incorporated vs. Duke Energy
Performance |
| Timeline |
| Iron Mountain |
| Duke Energy |
Iron Mountain and Duke Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Iron Mountain and Duke Energy
The main advantage of trading using opposite Iron Mountain and Duke Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Iron Mountain 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.| Iron Mountain vs. Equinix | Iron Mountain vs. Fundo Investimento Imobiliario | Iron Mountain vs. LESTE FDO INV | Iron Mountain vs. Fras le SA |
| Duke Energy vs. G2D Investments | Duke Energy vs. Iron Mountain Incorporated | Duke Energy vs. GX AI TECH | Duke Energy vs. Take Two Interactive Software |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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