Correlation Between NYSE Composite and Duke Energy
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and Duke Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Duke Energy Corp, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of Duke Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Duke Energy.
Diversification Opportunities for NYSE Composite and Duke Energy
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NYSE and Duke is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite 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 NYSE Composite 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 NYSE Composite 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 NYSE Composite i.e., NYSE Composite and Duke Energy go up and down completely randomly.
Pair Corralation between NYSE Composite and Duke Energy
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.9 times more return on investment than Duke Energy. However, NYSE Composite is 1.11 times less risky than Duke Energy. It trades about 0.33 of its potential returns per unit of risk. Duke Energy Corp is currently generating about 0.19 per unit of risk. If you would invest 1,909,542 in NYSE Composite on November 2, 2024 and sell it today you would earn a total of 90,340 from holding NYSE Composite or generate 4.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Duke Energy Corp
Performance |
| Timeline |
NYSE Composite and Duke Energy Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Duke Energy Corp
Pair trading matchups for Duke Energy
Pair Trading with NYSE Composite and Duke Energy
The main advantage of trading using opposite NYSE Composite and Duke Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Palomar Holdings | NYSE Composite vs. The Peoples Insurance | NYSE Composite vs. Radian Group | NYSE Composite vs. Nascent Wine |
| 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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