Correlation Between Evergy, and PPL
Can any of the company-specific risk be diversified away by investing in both Evergy, and PPL 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 PPL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Evergy, and PPL Corporation, you can compare the effects of market volatilities on Evergy, and PPL 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 PPL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evergy, and PPL.
Diversification Opportunities for Evergy, and PPL
Almost no diversification
The 3 months correlation between Evergy, and PPL is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Evergy, and PPL Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PPL Corporation 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 PPL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PPL Corporation has no effect on the direction of Evergy, i.e., Evergy, and PPL go up and down completely randomly.
Pair Corralation between Evergy, and PPL
Given the investment horizon of 90 days Evergy, is expected to generate 1.03 times less return on investment than PPL. But when comparing it to its historical volatility, Evergy, is 1.23 times less risky than PPL. It trades about 0.19 of its potential returns per unit of risk. PPL Corporation is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 3,154 in PPL Corporation on August 23, 2024 and sell it today you would earn a total of 331.00 from holding PPL Corporation or generate 10.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Evergy, vs. PPL Corp.
Performance |
| Timeline |
| Evergy, |
| PPL Corporation |
Evergy, and PPL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evergy, and PPL
The main advantage of trading using opposite Evergy, and PPL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evergy, position performs unexpectedly, PPL 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 PPL will offset losses from the drop in PPL's long position.| Evergy, vs. CMS Energy | Evergy, vs. Ameren Corp | Evergy, vs. Pinnacle West Capital | Evergy, vs. MGE 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
Other Complementary Tools
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |