Correlation Between Connecticut Light and PNM Old
Can any of the company-specific risk be diversified away by investing in both Connecticut Light 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 Connecticut Light and PNM Old into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Connecticut Light and PNM Old, you can compare the effects of market volatilities on Connecticut Light 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 Connecticut Light with a short position of PNM Old. Check out your portfolio center. Please also check ongoing floating volatility patterns of Connecticut Light and PNM Old.
Diversification Opportunities for Connecticut Light and PNM Old
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Connecticut and PNM is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding The Connecticut Light and PNM Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PNM Old and Connecticut Light 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 The Connecticut Light 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 Connecticut Light i.e., Connecticut Light and PNM Old go up and down completely randomly.
Pair Corralation between Connecticut Light and PNM Old
If you would invest 4,325 in PNM Old on October 11, 2024 and sell it today you would earn a total of 0.00 from holding PNM Old or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
The Connecticut Light vs. PNM Old
Performance |
| Timeline |
| Connecticut Light |
| PNM Old |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Connecticut Light and PNM Old Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Connecticut Light and PNM Old
The main advantage of trading using opposite Connecticut Light and PNM Old positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Connecticut Light 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.| Connecticut Light vs. NH Foods Ltd | Connecticut Light vs. ServiceNow | Connecticut Light vs. Cadence Design Systems | Connecticut Light vs. Rackspace Technology |
| 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |