Correlation Between Transmissora Aliana and Duke Energy
Can any of the company-specific risk be diversified away by investing in both Transmissora Aliana 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 Transmissora Aliana and Duke Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Transmissora Aliana de and Duke Energy, you can compare the effects of market volatilities on Transmissora Aliana 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 Transmissora Aliana with a short position of Duke Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transmissora Aliana and Duke Energy.
Diversification Opportunities for Transmissora Aliana and Duke Energy
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Transmissora and Duke is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Transmissora Aliana de and Duke Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Duke Energy and Transmissora Aliana 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 Transmissora Aliana de 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 Transmissora Aliana i.e., Transmissora Aliana and Duke Energy go up and down completely randomly.
Pair Corralation between Transmissora Aliana and Duke Energy
Assuming the 90 days trading horizon Transmissora Aliana de is expected to under-perform the Duke Energy. But the stock apears to be less risky and, when comparing its historical volatility, Transmissora Aliana de is 2.49 times less risky than Duke Energy. The stock trades about -0.05 of its potential returns per unit of risk. The Duke Energy is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 65,845 in Duke Energy on September 5, 2024 and sell it today you would earn a total of 3,315 from holding Duke Energy or generate 5.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 96.83% |
| Values | Daily Returns |
Transmissora Aliana de vs. Duke Energy
Performance |
| Timeline |
| Transmissora Aliana |
| Duke Energy |
Transmissora Aliana and Duke Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Transmissora Aliana and Duke Energy
The main advantage of trading using opposite Transmissora Aliana and Duke Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Transmissora Aliana 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.| Transmissora Aliana vs. Transmissora Aliana de | Transmissora Aliana vs. Klabin SA | Transmissora Aliana vs. Companhia de Saneamento | Transmissora Aliana vs. Transmissora Aliana de |
| Duke Energy vs. Transmissora Aliana de | Duke Energy vs. CTEEP Companhia | Duke Energy vs. Companhia Paranaense de | Duke Energy vs. Companhia Energtica de |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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