Correlation Between Evergy, and Exelon
Can any of the company-specific risk be diversified away by investing in both Evergy, and Exelon 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 Evergy, and Exelon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Evergy, and Exelon, you can compare the effects of market volatilities on Evergy, and Exelon 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 Evergy, with a short position of Exelon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evergy, and Exelon.
Diversification Opportunities for Evergy, and Exelon
Modest diversification
The 3 months correlation between Evergy, and Exelon is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Evergy, and Exelon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exelon and Evergy, 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 Evergy, are associated (or correlated) with Exelon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exelon has no effect on the direction of Evergy, i.e., Evergy, and Exelon go up and down completely randomly.
Pair Corralation between Evergy, and Exelon
Given the investment horizon of 90 days Evergy, is expected to generate 0.82 times more return on investment than Exelon. However, Evergy, is 1.22 times less risky than Exelon. It trades about 0.11 of its potential returns per unit of risk. Exelon is currently generating about 0.02 per unit of risk. If you would invest 4,876 in Evergy, on August 26, 2024 and sell it today you would earn a total of 1,550 from holding Evergy, or generate 31.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Evergy, vs. Exelon
Performance |
| Timeline |
| Evergy, |
| Exelon |
Evergy, and Exelon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evergy, and Exelon
The main advantage of trading using opposite Evergy, and Exelon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evergy, position performs unexpectedly, Exelon 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 Exelon will offset losses from the drop in Exelon's long position.| Evergy, vs. Dominion Energy | Evergy, vs. Consolidated Edison | Evergy, vs. Eversource Energy | Evergy, vs. FirstEnergy |
| Exelon vs. Duke Energy | Exelon vs. Dominion Energy | Exelon vs. Southern Company | Exelon vs. Consolidated Edison |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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