Correlation Between Affiliated Managers and Duke Energy
Can any of the company-specific risk be diversified away by investing in both Affiliated Managers 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 Affiliated Managers and Duke Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Affiliated Managers Group and Duke Energy Corp, you can compare the effects of market volatilities on Affiliated Managers 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 Affiliated Managers with a short position of Duke Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Affiliated Managers and Duke Energy.
Diversification Opportunities for Affiliated Managers and Duke Energy
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Affiliated and Duke is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Affiliated Managers Group and Duke Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Duke Energy Corp and Affiliated Managers 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 Affiliated Managers Group 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 Corp has no effect on the direction of Affiliated Managers i.e., Affiliated Managers and Duke Energy go up and down completely randomly.
Pair Corralation between Affiliated Managers and Duke Energy
Considering the 90-day investment horizon Affiliated Managers Group is expected to under-perform the Duke Energy. In addition to that, Affiliated Managers is 1.38 times more volatile than Duke Energy Corp. It trades about -0.35 of its total potential returns per unit of risk. Duke Energy Corp is currently generating about -0.15 per unit of volatility. If you would invest 2,514 in Duke Energy Corp on August 31, 2024 and sell it today you would lose (44.00) from holding Duke Energy Corp or give up 1.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Affiliated Managers Group vs. Duke Energy Corp
Performance |
| Timeline |
| Affiliated Managers |
| Duke Energy Corp |
Affiliated Managers and Duke Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Affiliated Managers and Duke Energy
The main advantage of trading using opposite Affiliated Managers and Duke Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Affiliated Managers 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.| Affiliated Managers vs. DBA Sempra 5750 | Affiliated Managers vs. CMS Energy Corp | Affiliated Managers vs. American Financial Group | Affiliated Managers vs. National Rural Utilities |
| Duke Energy vs. Southern Co | Duke Energy vs. DTE Energy Co | Duke Energy vs. CMS Energy Corp | Duke Energy vs. CMS Energy Corp |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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