Correlation Between Duke Energy and IDACORP
Can any of the company-specific risk be diversified away by investing in both Duke Energy and IDACORP 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 Duke Energy and IDACORP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Duke Energy and IDACORP, you can compare the effects of market volatilities on Duke Energy and IDACORP 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 Duke Energy with a short position of IDACORP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Duke Energy and IDACORP.
Diversification Opportunities for Duke Energy and IDACORP
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Duke and IDACORP is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Duke Energy and IDACORP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IDACORP and Duke Energy 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 are associated (or correlated) with IDACORP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IDACORP has no effect on the direction of Duke Energy i.e., Duke Energy and IDACORP go up and down completely randomly.
Pair Corralation between Duke Energy and IDACORP
Considering the 90-day investment horizon Duke Energy is expected to under-perform the IDACORP. In addition to that, Duke Energy is 1.15 times more volatile than IDACORP. It trades about -0.09 of its total potential returns per unit of risk. IDACORP is currently generating about 0.14 per unit of volatility. If you would invest 10,365 in IDACORP on September 16, 2024 and sell it today you would earn a total of 941.00 from holding IDACORP or generate 9.08% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Duke Energy vs. IDACORP
Performance |
Timeline |
Duke Energy |
IDACORP |
Duke Energy and IDACORP Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Duke Energy and IDACORP
The main advantage of trading using opposite Duke Energy and IDACORP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Duke Energy position performs unexpectedly, IDACORP 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 IDACORP will offset losses from the drop in IDACORP's long position.Duke Energy vs. Consolidated Edison | Duke Energy vs. Dominion Energy | Duke Energy vs. American Electric Power | Duke Energy vs. Nextera Energy |
IDACORP vs. CMS Energy | IDACORP vs. Pinnacle West Capital | IDACORP vs. Alliant Energy Corp | IDACORP vs. Portland General Electric |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
Other Complementary Tools
Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
Fundamental Analysis View fundamental data based on most recent published financial statements | |
Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |