Correlation Between Duke Energy and Rightsmile

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

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

Diversification Opportunities for Duke Energy and Rightsmile

0.0

Correlation Coefficient

Duke Energy  Rightsmile

Pay attention - limited upside

The 3 months correlation between Duke and Rightsmile is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Duke Energy and Rightsmile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rightsmile 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 Rightsmile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rightsmile has no effect on the direction of Duke Energy i.e., Duke Energy and Rightsmile go up and down completely randomly.

Pair Corralation between Duke Energy and Rightsmile

If you would invest  10,672  in Duke Energy on December 29, 2024 and sell it today you would earn a total of  1,269  from holding Duke Energy or generate 11.89% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Duke Energy  vs.  Rightsmile

Duke Energy

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Duke Energy are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite quite unsteady basic indicators, Duke Energy may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Rightsmile

Risk-Adjusted Performance

Very Weak

Over the last 90 days Rightsmile has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical and fundamental indicators, Rightsmile is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Duke Energy and Rightsmile

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

The idea behind Duke Energy and Rightsmile 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.

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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.