Correlation Between Centrais Electricas and PNM Old
Can any of the company-specific risk be diversified away by investing in both Centrais Electricas 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 Centrais Electricas and PNM Old into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Centrais Electricas Brasileiras and PNM Old, you can compare the effects of market volatilities on Centrais Electricas 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 Centrais Electricas with a short position of PNM Old. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centrais Electricas and PNM Old.
Diversification Opportunities for Centrais Electricas and PNM Old
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Centrais and PNM is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Centrais Electricas Brasileira and PNM Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PNM Old and Centrais Electricas 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 Centrais Electricas Brasileiras 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 Centrais Electricas i.e., Centrais Electricas and PNM Old go up and down completely randomly.
Pair Corralation between Centrais Electricas and PNM Old
If you would invest 563.00 in Centrais Electricas Brasileiras on October 26, 2024 and sell it today you would earn a total of 29.00 from holding Centrais Electricas Brasileiras or generate 5.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 5.56% |
| Values | Daily Returns |
Centrais Electricas Brasileira vs. PNM Old
Performance |
| Timeline |
| Centrais Electricas |
| PNM Old |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Centrais Electricas and PNM Old Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Centrais Electricas and PNM Old
The main advantage of trading using opposite Centrais Electricas and PNM Old positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centrais Electricas 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.| Centrais Electricas vs. Genie Energy | Centrais Electricas vs. Central Puerto SA | Centrais Electricas vs. Korea Electric Power | Centrais Electricas vs. Empresa Distribuidora y |
| 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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