Correlation Between MAHLE Metal and Duke Energy
Can any of the company-specific risk be diversified away by investing in both MAHLE Metal 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 MAHLE Metal and Duke Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MAHLE Metal Leve and Duke Energy, you can compare the effects of market volatilities on MAHLE Metal 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 MAHLE Metal with a short position of Duke Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of MAHLE Metal and Duke Energy.
Diversification Opportunities for MAHLE Metal and Duke Energy
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between MAHLE and Duke is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding MAHLE Metal Leve and Duke Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Duke Energy and MAHLE Metal 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 MAHLE Metal Leve 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 MAHLE Metal i.e., MAHLE Metal and Duke Energy go up and down completely randomly.
Pair Corralation between MAHLE Metal and Duke Energy
Assuming the 90 days trading horizon MAHLE Metal Leve is expected to under-perform the Duke Energy. But the stock apears to be less risky and, when comparing its historical volatility, MAHLE Metal Leve is 1.26 times less risky than Duke Energy. The stock trades about -0.14 of its potential returns per unit of risk. The Duke Energy is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 65,061 in Duke Energy on September 12, 2024 and sell it today you would earn a total of 2,146 from holding Duke Energy or generate 3.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 85.71% |
| Values | Daily Returns |
MAHLE Metal Leve vs. Duke Energy
Performance |
| Timeline |
| MAHLE Metal Leve |
| Duke Energy |
MAHLE Metal and Duke Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MAHLE Metal and Duke Energy
The main advantage of trading using opposite MAHLE Metal and Duke Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MAHLE Metal 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.| MAHLE Metal vs. Tupy SA | MAHLE Metal vs. Engie Brasil Energia | MAHLE Metal vs. Grendene SA | MAHLE Metal vs. M Dias Branco |
| Duke Energy vs. United Rentals | Duke Energy vs. Bemobi Mobile Tech | Duke Energy vs. Autohome | 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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