Correlation Between GBS Software and Duke Energy
Can any of the company-specific risk be diversified away by investing in both GBS Software 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 GBS Software and Duke Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GBS Software AG and Duke Energy, you can compare the effects of market volatilities on GBS Software 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 GBS Software with a short position of Duke Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of GBS Software and Duke Energy.
Diversification Opportunities for GBS Software and Duke Energy
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GBS and Duke is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding GBS Software AG and Duke Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Duke Energy and GBS Software 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 GBS Software AG 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 GBS Software i.e., GBS Software and Duke Energy go up and down completely randomly.
Pair Corralation between GBS Software and Duke Energy
Assuming the 90 days trading horizon GBS Software AG is expected to generate 2.34 times more return on investment than Duke Energy. However, GBS Software is 2.34 times more volatile than Duke Energy. It trades about 0.08 of its potential returns per unit of risk. Duke Energy is currently generating about 0.03 per unit of risk. If you would invest 270.00 in GBS Software AG on October 24, 2024 and sell it today you would earn a total of 44.00 from holding GBS Software AG or generate 16.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GBS Software AG vs. Duke Energy
Performance |
| Timeline |
| GBS Software AG |
| Duke Energy |
GBS Software and Duke Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GBS Software and Duke Energy
The main advantage of trading using opposite GBS Software and Duke Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GBS Software 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.| GBS Software vs. Air Transport Services | GBS Software vs. EVS Broadcast Equipment | GBS Software vs. Gold Road Resources | GBS Software vs. IMAGIN MEDICAL INC |
| Duke Energy vs. Brockhaus Capital Management | Duke Energy vs. Easy Software AG | Duke Energy vs. GBS Software AG | Duke Energy vs. Axway Software SA |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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