Correlation Between 26442CAE4 and Sapiens International

Can any of the company-specific risk be diversified away by investing in both 26442CAE4 and Sapiens International 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 26442CAE4 and Sapiens International into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between DUKE ENERGY CAROLINAS and Sapiens International, you can compare the effects of market volatilities on 26442CAE4 and Sapiens International 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 26442CAE4 with a short position of Sapiens International. Check out your portfolio center. Please also check ongoing floating volatility patterns of 26442CAE4 and Sapiens International.

Diversification Opportunities for 26442CAE4 and Sapiens International

-0.36

Correlation Coefficient

26442CAE4  Sapiens International

Very good diversification

The 3 months correlation between 26442CAE4 and Sapiens is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding DUKE ENERGY CAROLINAS and Sapiens International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sapiens International and 26442CAE4 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 CAROLINAS are associated (or correlated) with Sapiens International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sapiens International has no effect on the direction of 26442CAE4 i.e., 26442CAE4 and Sapiens International go up and down completely randomly.

Pair Corralation between 26442CAE4 and Sapiens International

Assuming the 90 days trading horizon DUKE ENERGY CAROLINAS is expected to generate 0.86 times more return on investment than Sapiens International. However, DUKE ENERGY CAROLINAS is 1.17 times less risky than Sapiens International. It trades about 0.08 of its potential returns per unit of risk. Sapiens International is currently generating about 0.0 per unit of risk. If you would invest  10,609  in DUKE ENERGY CAROLINAS on December 26, 2024 and sell it today you would earn a total of  479.00  from holding DUKE ENERGY CAROLINAS or generate 4.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	70.0%
Values	Daily Returns

DUKE ENERGY CAROLINAS  vs.  Sapiens International

DUKE ENERGY CAROLINAS

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in DUKE ENERGY CAROLINAS are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting basic indicators, 26442CAE4 may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Sapiens International

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sapiens International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Sapiens International is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with 26442CAE4 and Sapiens International

The main advantage of trading using opposite 26442CAE4 and Sapiens International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 26442CAE4 position performs unexpectedly, Sapiens International 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 Sapiens International will offset losses from the drop in Sapiens International's long position.

The idea behind DUKE ENERGY CAROLINAS and Sapiens International 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.