Correlation Between Duke Energy and Utilities Fund

Can any of the company-specific risk be diversified away by investing in both Duke Energy and Utilities Fund 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 Utilities Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Duke Energy Corp and Utilities Fund Investor, you can compare the effects of market volatilities on Duke Energy and Utilities Fund 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 Utilities Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Duke Energy and Utilities Fund.

Diversification Opportunities for Duke Energy and Utilities Fund

-0.41

Correlation Coefficient

Duke Energy  Utilities Fund

Very good diversification

The 3 months correlation between Duke and Utilities is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Duke Energy Corp and Utilities Fund Investor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Utilities Fund Investor 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 Corp are associated (or correlated) with Utilities Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Utilities Fund Investor has no effect on the direction of Duke Energy i.e., Duke Energy and Utilities Fund go up and down completely randomly.

Pair Corralation between Duke Energy and Utilities Fund

Given the investment horizon of 90 days Duke Energy Corp is expected to under-perform the Utilities Fund. But the stock apears to be less risky and, when comparing its historical volatility, Duke Energy Corp is 2.09 times less risky than Utilities Fund. The stock trades about -0.02 of its potential returns per unit of risk. The Utilities Fund Investor is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  5,981  in Utilities Fund Investor on May 1, 2025 and sell it today you would earn a total of  534.00  from holding Utilities Fund Investor or generate 8.93% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Duke Energy Corp  vs.  Utilities Fund Investor

Duke Energy Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Duke Energy Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong forward-looking signals, Duke Energy is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Utilities Fund Investor

Risk-Adjusted Performance

Good

Over the last 90 days Utilities Fund Investor has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly weak forward indicators, Utilities Fund may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Duke Energy and Utilities Fund

The main advantage of trading using opposite Duke Energy and Utilities Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Duke Energy position performs unexpectedly, Utilities Fund 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 Utilities Fund will offset losses from the drop in Utilities Fund's long position.

The idea behind Duke Energy Corp and Utilities Fund Investor 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.

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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..