Correlation Between DTE Energy and VMware

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both DTE Energy and VMware 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 DTE Energy and VMware into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DTE Energy and VMware Inc, you can compare the effects of market volatilities on DTE Energy and VMware 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 DTE Energy with a short position of VMware. Check out your portfolio center. Please also check ongoing floating volatility patterns of DTE Energy and VMware.

Diversification Opportunities for DTE Energy and VMware

0.34
  Correlation Coefficient

Weak diversification

The 3 months correlation between DTE Energy and VMware is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding DTE Energy and VMware Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VMware Inc and DTE 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 DTE Energy are associated (or correlated) with VMware. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VMware Inc has no effect on the direction of DTE Energy i.e., DTE Energy and VMware go up and down completely randomly.

Pair Corralation between DTE Energy and VMware

Considering the 90-day investment horizon DTE Energy is expected to generate 2.13 times less return on investment than VMware. In addition to that, DTE Energy is 1.09 times more volatile than VMware Inc. It trades about 0.1 of its total potential returns per unit of risk. VMware Inc is currently generating about 0.23 per unit of volatility. If you would invest  11,193  in VMware Inc on September 9, 2022 and sell it today you would earn a total of  719.00  from holding VMware Inc or generate 6.42% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

DTE Energy  vs.  VMware Inc

 Performance (%) 
       Timeline  
DTE Energy 
DTE Energy Performance
0 of 100
Over the last 90 days DTE Energy has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in January 2023. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

DTE Energy Price Channel

VMware Inc 
VMware Performance
0 of 100
Over the last 90 days VMware Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable primary indicators, VMware is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

VMware Price Channel

DTE Energy and VMware Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with DTE Energy and VMware

The main advantage of trading using opposite DTE Energy and VMware positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DTE Energy position performs unexpectedly, VMware 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 VMware will offset losses from the drop in VMware's long position.
DTE Energy vs. Chevron Corp
DTE Energy vs. Microsoft
DTE Energy vs. Walmart
DTE Energy vs. Dupont De Nemours
The idea behind DTE Energy and VMware Inc 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.
VMware vs. General Electric
VMware vs. Walmart
VMware vs. American Express
VMware vs. Chevron Corp
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.

Other Complementary Tools

Sync Your Broker
Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors.
Go
Performance Analysis
Check effects of mean-variance optimization against your current asset allocation
Go
Efficient Frontier
Plot and analyze your portfolio and positions against risk-return landscape of the market.
Go
Fund Screener
Find actively-traded funds from around the world traded on over 30 global exchanges
Go
Portfolio Diagnostics
Use generated alerts and portfolio events aggregator to diagnose current holdings
Go
Alpha Finder
Use alpha and beta coefficients to find investment opportunities after accounting for the risk
Go
Premium Stories
Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope
Go
Bollinger Bands
Use Bollinger Bands indicator to analyze target price for a given investing horizon
Go
Idea Optimizer
Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio
Go
Money Flow Index
Determine momentum by analyzing Money Flow Index and other technical indicators
Go
Equity Search
Search for actively traded equities including funds and ETFs from over 30 global markets
Go
CEO Directory
Screen CEOs from public companies around the world
Go