Correlation Between 26442CAH7 and California-Engels

Can any of the company-specific risk be diversified away by investing in both 26442CAH7 and California-Engels 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 26442CAH7 and California-Engels 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 California Engels Mining, you can compare the effects of market volatilities on 26442CAH7 and California-Engels 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 26442CAH7 with a short position of California-Engels. Check out your portfolio center. Please also check ongoing floating volatility patterns of 26442CAH7 and California-Engels.

Diversification Opportunities for 26442CAH7 and California-Engels

0.0

Correlation Coefficient

26442CAH7  California-Engels

Pay attention - limited upside

The 3 months correlation between 26442CAH7 and California-Engels is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding DUKE ENERGY CAROLINAS and California Engels Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on California Engels Mining and 26442CAH7 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 California-Engels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of California Engels Mining has no effect on the direction of 26442CAH7 i.e., 26442CAH7 and California-Engels go up and down completely randomly.

Pair Corralation between 26442CAH7 and California-Engels

If you would invest  10,052  in DUKE ENERGY CAROLINAS on December 26, 2024 and sell it today you would earn a total of  219.00  from holding DUKE ENERGY CAROLINAS or generate 2.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	96.83%
Values	Daily Returns

DUKE ENERGY CAROLINAS  vs.  California Engels Mining

DUKE ENERGY CAROLINAS

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in DUKE ENERGY CAROLINAS are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, 26442CAH7 is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

California Engels Mining

Risk-Adjusted Performance

Very Weak

Over the last 90 days California Engels Mining has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, California-Engels is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with 26442CAH7 and California-Engels

The main advantage of trading using opposite 26442CAH7 and California-Engels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 26442CAH7 position performs unexpectedly, California-Engels 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 California-Engels will offset losses from the drop in California-Engels' long position.

The idea behind DUKE ENERGY CAROLINAS and California Engels Mining 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.