Correlation Between CMS Energy and PNM Old
Can any of the company-specific risk be diversified away by investing in both CMS Energy and PNM Old 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 CMS Energy and PNM Old into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CMS Energy and PNM Old, you can compare the effects of market volatilities on CMS Energy and PNM Old 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 CMS Energy with a short position of PNM Old. Check out your portfolio center. Please also check ongoing floating volatility patterns of CMS Energy and PNM Old.
Diversification Opportunities for CMS Energy and PNM Old
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CMS and PNM is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CMS Energy and PNM Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PNM Old and CMS 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 CMS Energy are associated (or correlated) with PNM Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PNM Old has no effect on the direction of CMS Energy i.e., CMS Energy and PNM Old go up and down completely randomly.
Pair Corralation between CMS Energy and PNM Old
If you would invest 6,755 in CMS Energy on November 18, 2024 and sell it today you would earn a total of 126.00 from holding CMS Energy or generate 1.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
CMS Energy vs. PNM Old
Performance |
| Timeline |
| CMS Energy |
| PNM Old |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
CMS Energy and PNM Old Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CMS Energy and PNM Old
The main advantage of trading using opposite CMS Energy and PNM Old positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CMS Energy position performs unexpectedly, PNM Old 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 PNM Old will offset losses from the drop in PNM Old's long position.| CMS Energy vs. Entergy | CMS Energy vs. Ameren Corp | CMS Energy vs. CenterPoint Energy | CMS Energy vs. Alliant Energy Corp |
| PNM Old vs. Portland General Electric | PNM Old vs. MGE Energy | PNM Old vs. CMS Energy | PNM Old vs. OGE 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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