Correlation Between Ellomay Capital and Duke Energy

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

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

Diversification Opportunities for Ellomay Capital and Duke Energy

-0.28

Correlation Coefficient

Ellomay Capital  Duke Energy

Very good diversification

The 3 months correlation between Ellomay and Duke is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Ellomay Capital and Duke Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Duke Energy Corp and Ellomay Capital 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 Ellomay Capital 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 Corp has no effect on the direction of Ellomay Capital i.e., Ellomay Capital and Duke Energy go up and down completely randomly.

Pair Corralation between Ellomay Capital and Duke Energy

Given the investment horizon of 90 days Ellomay Capital is expected to generate 1.48 times less return on investment than Duke Energy. In addition to that, Ellomay Capital is 4.81 times more volatile than Duke Energy Corp. It trades about 0.01 of its total potential returns per unit of risk. Duke Energy Corp is currently generating about 0.06 per unit of volatility. If you would invest  2,435  in Duke Energy Corp on November 29, 2024 and sell it today you would earn a total of  47.00  from holding Duke Energy Corp or generate 1.93% return on investment over 90 days.

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

Ellomay Capital  vs.  Duke Energy Corp

Ellomay Capital

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ellomay Capital has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy essential indicators, Ellomay Capital is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Duke Energy Corp

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Duke Energy Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. 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.

Pair Trading with Ellomay Capital and Duke Energy

The main advantage of trading using opposite Ellomay Capital and Duke Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ellomay Capital 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.

The idea behind Ellomay Capital and Duke Energy Corp 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.