Correlation Between Evergy, and Franklin Utilities
Can any of the company-specific risk be diversified away by investing in both Evergy, and Franklin Utilities 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 Franklin Utilities into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Evergy, and Franklin Utilities, you can compare the effects of market volatilities on Evergy, and Franklin Utilities 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 Franklin Utilities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evergy, and Franklin Utilities.
Diversification Opportunities for Evergy, and Franklin Utilities
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Evergy, and Franklin is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Evergy, and Franklin Utilities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Utilities 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 Franklin Utilities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Utilities has no effect on the direction of Evergy, i.e., Evergy, and Franklin Utilities go up and down completely randomly.
Pair Corralation between Evergy, and Franklin Utilities
Given the investment horizon of 90 days Evergy, is expected to generate 0.93 times more return on investment than Franklin Utilities. However, Evergy, is 1.08 times less risky than Franklin Utilities. It trades about 0.42 of its potential returns per unit of risk. Franklin Utilities is currently generating about 0.27 per unit of risk. If you would invest 5,981 in Evergy, on September 1, 2024 and sell it today you would earn a total of 482.00 from holding Evergy, or generate 8.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Evergy, vs. Franklin Utilities
Performance |
| Timeline |
| Evergy, |
| Franklin Utilities |
Evergy, and Franklin Utilities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evergy, and Franklin Utilities
The main advantage of trading using opposite Evergy, and Franklin Utilities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evergy, position performs unexpectedly, Franklin Utilities 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 Franklin Utilities will offset losses from the drop in Franklin Utilities' long position.| Evergy, vs. CMS Energy | Evergy, vs. Ameren Corp | Evergy, vs. Pinnacle West Capital | Evergy, vs. MGE Energy |
| Franklin Utilities vs. Federated Ohio Municipal | Franklin Utilities vs. The National Tax Free | Franklin Utilities vs. Nuveen Minnesota Municipal | Franklin Utilities vs. Morningstar Municipal Bond |
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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