Correlation Between American Electric and Evergy,
Can any of the company-specific risk be diversified away by investing in both American Electric and Evergy, 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 American Electric and Evergy, into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Electric Power and Evergy,, you can compare the effects of market volatilities on American Electric and Evergy, 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 American Electric with a short position of Evergy,. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Electric and Evergy,.
Diversification Opportunities for American Electric and Evergy,
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between American and Evergy, is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding American Electric Power and Evergy, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evergy, and American Electric 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 American Electric Power are associated (or correlated) with Evergy,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evergy, has no effect on the direction of American Electric i.e., American Electric and Evergy, go up and down completely randomly.
Pair Corralation between American Electric and Evergy,
Considering the 90-day investment horizon American Electric Power is expected to under-perform the Evergy,. In addition to that, American Electric is 1.57 times more volatile than Evergy,. It trades about -0.02 of its total potential returns per unit of risk. Evergy, is currently generating about 0.22 per unit of volatility. If you would invest 6,151 in Evergy, on August 23, 2024 and sell it today you would earn a total of 305.00 from holding Evergy, or generate 4.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Electric Power vs. Evergy,
Performance |
| Timeline |
| American Electric Power |
| Evergy, |
American Electric and Evergy, Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Electric and Evergy,
The main advantage of trading using opposite American Electric and Evergy, positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Electric position performs unexpectedly, Evergy, 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 Evergy, will offset losses from the drop in Evergy,'s long position.| American Electric vs. Southern Company | American Electric vs. Dominion Energy | American Electric vs. Nextera Energy | American Electric vs. Consolidated Edison |
| Evergy, vs. CMS Energy | Evergy, vs. Ameren Corp | Evergy, vs. Pinnacle West Capital | Evergy, vs. MGE Energy |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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