Correlation Between Nasdaq and Duke Energy
Can any of the company-specific risk be diversified away by investing in both Nasdaq 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 Nasdaq and Duke Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nasdaq Inc and Duke Energy, you can compare the effects of market volatilities on Nasdaq 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 Nasdaq with a short position of Duke Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq and Duke Energy.
Diversification Opportunities for Nasdaq and Duke Energy
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nasdaq and Duke is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq Inc and Duke Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Duke Energy and Nasdaq 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 Nasdaq Inc 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 Nasdaq i.e., Nasdaq and Duke Energy go up and down completely randomly.
Pair Corralation between Nasdaq and Duke Energy
Given the investment horizon of 90 days Nasdaq Inc is expected to generate 1.06 times more return on investment than Duke Energy. However, Nasdaq is 1.06 times more volatile than Duke Energy. It trades about 0.14 of its potential returns per unit of risk. Duke Energy is currently generating about 0.1 per unit of risk. If you would invest 5,318 in Nasdaq Inc on September 14, 2024 and sell it today you would earn a total of 2,694 from holding Nasdaq Inc or generate 50.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.18% |
| Values | Daily Returns |
Nasdaq Inc vs. Duke Energy
Performance |
| Timeline |
| Nasdaq Inc |
| Duke Energy |
Nasdaq and Duke Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nasdaq and Duke Energy
The main advantage of trading using opposite Nasdaq and Duke Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq 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.The idea behind Nasdaq Inc and Duke Energy pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Duke Energy vs. WEC Energy Group | Duke Energy vs. ENDESA ADR 12 | Duke Energy vs. CMS Energy | Duke Energy vs. Terna Rete |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
Other Complementary Tools
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Stocks Directory Find actively traded stocks across global markets | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data |