Correlation Between Duke Energy and Ellomay Capital

Can any of the company-specific risk be diversified away by investing in both Duke Energy and Ellomay Capital 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 Ellomay Capital 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 Ellomay Capital, you can compare the effects of market volatilities on Duke Energy and Ellomay Capital 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 Ellomay Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Duke Energy and Ellomay Capital.

Diversification Opportunities for Duke Energy and Ellomay Capital

-0.46

Correlation Coefficient

Duke Energy  Ellomay Capital

Very good diversification

The 3 months correlation between Duke and Ellomay is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Duke Energy Corp and Ellomay Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ellomay Capital 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 Ellomay Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ellomay Capital has no effect on the direction of Duke Energy i.e., Duke Energy and Ellomay Capital go up and down completely randomly.

Pair Corralation between Duke Energy and Ellomay Capital

Given the investment horizon of 90 days Duke Energy is expected to generate 1593.67 times less return on investment than Ellomay Capital. But when comparing it to its historical volatility, Duke Energy Corp is 7.14 times less risky than Ellomay Capital. It trades about 0.0 of its potential returns per unit of risk. Ellomay Capital is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  1,260  in Ellomay Capital on September 1, 2024 and sell it today you would earn a total of  356.00  from holding Ellomay Capital or generate 28.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	92.06%
Values	Daily Returns

Duke Energy Corp  vs.  Ellomay Capital

Duke Energy Corp

Risk-Adjusted Performance

0 of 100

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.

Ellomay Capital

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ellomay Capital are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain essential indicators, Ellomay Capital displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Duke Energy and Ellomay Capital

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

The idea behind Duke Energy Corp and Ellomay Capital 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.