Correlation Between Hawaiian Electric and PNM Resources
Can any of the company-specific risk be diversified away by investing in both Hawaiian Electric and PNM Resources 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 Hawaiian Electric and PNM Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hawaiian Electric Industries and PNM Resources, you can compare the effects of market volatilities on Hawaiian Electric and PNM Resources 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 Hawaiian Electric with a short position of PNM Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hawaiian Electric and PNM Resources.
Diversification Opportunities for Hawaiian Electric and PNM Resources
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hawaiian and PNM is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Hawaiian Electric Industries and PNM Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PNM Resources and Hawaiian Electric 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 Hawaiian Electric Industries are associated (or correlated) with PNM Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PNM Resources has no effect on the direction of Hawaiian Electric i.e., Hawaiian Electric and PNM Resources go up and down completely randomly.
Pair Corralation between Hawaiian Electric and PNM Resources
If you would invest 1,000.00 in Hawaiian Electric Industries on August 31, 2024 and sell it today you would earn a total of 53.00 from holding Hawaiian Electric Industries or generate 5.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Hawaiian Electric Industries vs. PNM Resources
Performance |
| Timeline |
| Hawaiian Electric |
| PNM Resources |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
Hawaiian Electric and PNM Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hawaiian Electric and PNM Resources
The main advantage of trading using opposite Hawaiian Electric and PNM Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hawaiian Electric position performs unexpectedly, PNM Resources 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 Resources will offset losses from the drop in PNM Resources' long position.| Hawaiian Electric vs. DTE Energy | Hawaiian Electric vs. Alliant Energy Corp | Hawaiian Electric vs. Ameren Corp | Hawaiian Electric vs. CenterPoint Energy |
| PNM Resources vs. Portland General Electric | PNM Resources vs. MGE Energy | PNM Resources vs. CMS Energy | PNM Resources 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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