Correlation Between Rightsmile and Duke Energy

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

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

Diversification Opportunities for Rightsmile and Duke Energy

0.0

Correlation Coefficient

Rightsmile  Duke Energy

Pay attention - limited upside

The 3 months correlation between Rightsmile and Duke is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Rightsmile and Duke Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Duke Energy and Rightsmile 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 Rightsmile 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 has no effect on the direction of Rightsmile i.e., Rightsmile and Duke Energy go up and down completely randomly.

Pair Corralation between Rightsmile and Duke Energy

If you would invest  11,412  in Duke Energy on December 2, 2024 and sell it today you would earn a total of  337.00  from holding Duke Energy or generate 2.95% return on investment over 90 days.

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

Rightsmile  vs.  Duke Energy

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.

Duke Energy

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Duke Energy are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Duke Energy is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Rightsmile and Duke Energy

The main advantage of trading using opposite Rightsmile and Duke Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rightsmile 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 Rightsmile and Duke Energy 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..