Correlation Between Duke Energy and Excelerate Energy
Can any of the company-specific risk be diversified away by investing in both Duke Energy and Excelerate 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 Duke Energy and Excelerate Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Duke Energy and Excelerate Energy, you can compare the effects of market volatilities on Duke Energy and Excelerate 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 Duke Energy with a short position of Excelerate Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Duke Energy and Excelerate Energy.
Diversification Opportunities for Duke Energy and Excelerate Energy
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Duke and Excelerate is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Duke Energy and Excelerate Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Excelerate Energy and Duke Energy 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 Duke Energy are associated (or correlated) with Excelerate Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Excelerate Energy has no effect on the direction of Duke Energy i.e., Duke Energy and Excelerate Energy go up and down completely randomly.
Pair Corralation between Duke Energy and Excelerate Energy
Considering the 90-day investment horizon Duke Energy is expected to generate 0.4 times more return on investment than Excelerate Energy. However, Duke Energy is 2.48 times less risky than Excelerate Energy. It trades about 0.0 of its potential returns per unit of risk. Excelerate Energy is currently generating about -0.01 per unit of risk. If you would invest 10,005 in Duke Energy on January 21, 2024 and sell it today you would lose (181.00) from holding Duke Energy or give up 1.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Duke Energy vs. Excelerate Energy
Performance |
| Timeline |
| Duke Energy |
| Excelerate Energy |
Duke Energy and Excelerate Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Duke Energy and Excelerate Energy
The main advantage of trading using opposite Duke Energy and Excelerate Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Duke Energy position performs unexpectedly, Excelerate 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 Excelerate Energy will offset losses from the drop in Excelerate Energy's long position.The idea behind Duke Energy and Excelerate 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.| Excelerate Energy vs. Atlantica Sustainable Infrastructure | Excelerate Energy vs. Clearway Energy | Excelerate Energy vs. Brookfield Renewable Corp | Excelerate Energy vs. Nextera Energy Partners |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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