Correlation Between 26441CAP0 and Gap,

Can any of the company-specific risk be diversified away by investing in both 26441CAP0 and Gap, 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 26441CAP0 and Gap, into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between DUKE ENERGY P and The Gap,, you can compare the effects of market volatilities on 26441CAP0 and Gap, 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 26441CAP0 with a short position of Gap,. Check out your portfolio center. Please also check ongoing floating volatility patterns of 26441CAP0 and Gap,.

Diversification Opportunities for 26441CAP0 and Gap,

-0.25

Correlation Coefficient

26441CAP0  Gap,

Very good diversification

The 3 months correlation between 26441CAP0 and Gap, is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding DUKE ENERGY P and The Gap, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gap, and 26441CAP0 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 P are associated (or correlated) with Gap,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gap, has no effect on the direction of 26441CAP0 i.e., 26441CAP0 and Gap, go up and down completely randomly.

Pair Corralation between 26441CAP0 and Gap,

Assuming the 90 days trading horizon DUKE ENERGY P is expected to generate 0.54 times more return on investment than Gap,. However, DUKE ENERGY P is 1.85 times less risky than Gap,. It trades about -0.17 of its potential returns per unit of risk. The Gap, is currently generating about -0.16 per unit of risk. If you would invest  8,940  in DUKE ENERGY P on October 11, 2024 and sell it today you would lose (290.00) from holding DUKE ENERGY P or give up 3.24% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

DUKE ENERGY P  vs.  The Gap,

DUKE ENERGY P

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DUKE ENERGY P has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for DUKE ENERGY P investors.

Gap,

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in The Gap, are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, Gap, may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with 26441CAP0 and Gap,

The main advantage of trading using opposite 26441CAP0 and Gap, positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 26441CAP0 position performs unexpectedly, Gap, 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 Gap, will offset losses from the drop in Gap,'s long position.

The idea behind DUKE ENERGY P and The Gap, 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.