Correlation Between Moelis and 26442CAR5

Can any of the company-specific risk be diversified away by investing in both Moelis and 26442CAR5 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 Moelis and 26442CAR5 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Moelis Co and DUKE ENERGY CAROLINAS, you can compare the effects of market volatilities on Moelis and 26442CAR5 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 Moelis with a short position of 26442CAR5. Check out your portfolio center. Please also check ongoing floating volatility patterns of Moelis and 26442CAR5.

Diversification Opportunities for Moelis and 26442CAR5

0.03

Correlation Coefficient

Moelis  26442CAR5

Significant diversification

The 3 months correlation between Moelis and 26442CAR5 is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Moelis Co and DUKE ENERGY CAROLINAS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DUKE ENERGY CAROLINAS and Moelis 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 Moelis Co are associated (or correlated) with 26442CAR5. 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 CAROLINAS has no effect on the direction of Moelis i.e., Moelis and 26442CAR5 go up and down completely randomly.

Pair Corralation between Moelis and 26442CAR5

Allowing for the 90-day total investment horizon Moelis Co is expected to under-perform the 26442CAR5. But the stock apears to be less risky and, when comparing its historical volatility, Moelis Co is 1.62 times less risky than 26442CAR5. The stock trades about -0.15 of its potential returns per unit of risk. The DUKE ENERGY CAROLINAS is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  7,786  in DUKE ENERGY CAROLINAS on December 24, 2024 and sell it today you would earn a total of  13.00  from holding DUKE ENERGY CAROLINAS or generate 0.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	61.67%
Values	Daily Returns

Moelis Co  vs.  DUKE ENERGY CAROLINAS

Moelis

Risk-Adjusted Performance

Very Weak

Over the last 90 days Moelis Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

DUKE ENERGY CAROLINAS

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in DUKE ENERGY CAROLINAS are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, 26442CAR5 is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Moelis and 26442CAR5

The main advantage of trading using opposite Moelis and 26442CAR5 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Moelis position performs unexpectedly, 26442CAR5 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 26442CAR5 will offset losses from the drop in 26442CAR5's long position.

The idea behind Moelis Co and DUKE ENERGY CAROLINAS 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.