Correlation Between Tradeweb Markets and 26442CAN4

Can any of the company-specific risk be diversified away by investing in both Tradeweb Markets and 26442CAN4 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 Tradeweb Markets and 26442CAN4 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Tradeweb Markets and DUKE ENERGY CAROLINAS, you can compare the effects of market volatilities on Tradeweb Markets and 26442CAN4 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 Tradeweb Markets with a short position of 26442CAN4. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tradeweb Markets and 26442CAN4.

Diversification Opportunities for Tradeweb Markets and 26442CAN4

0.4

Correlation Coefficient

Tradeweb Markets  26442CAN4

Very weak diversification

The 3 months correlation between Tradeweb and 26442CAN4 is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Tradeweb Markets 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 Tradeweb Markets 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 Tradeweb Markets are associated (or correlated) with 26442CAN4. 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 Tradeweb Markets i.e., Tradeweb Markets and 26442CAN4 go up and down completely randomly.

Pair Corralation between Tradeweb Markets and 26442CAN4

Allowing for the 90-day total investment horizon Tradeweb Markets is expected to generate 2.18 times more return on investment than 26442CAN4. However, Tradeweb Markets is 2.18 times more volatile than DUKE ENERGY CAROLINAS. It trades about 0.08 of its potential returns per unit of risk. DUKE ENERGY CAROLINAS is currently generating about 0.02 per unit of risk. If you would invest  13,528  in Tradeweb Markets on December 25, 2024 and sell it today you would earn a total of  880.00  from holding Tradeweb Markets or generate 6.51% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	86.44%
Values	Daily Returns

Tradeweb Markets  vs.  DUKE ENERGY CAROLINAS

Tradeweb Markets

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Tradeweb Markets are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, Tradeweb Markets may actually be approaching a critical reversion point that can send shares even higher in April 2025.

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, 26442CAN4 is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Tradeweb Markets and 26442CAN4

The main advantage of trading using opposite Tradeweb Markets and 26442CAN4 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tradeweb Markets position performs unexpectedly, 26442CAN4 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 26442CAN4 will offset losses from the drop in 26442CAN4's long position.

The idea behind Tradeweb Markets 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.

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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.