Correlation Between PNM Old and Dow Jones
Can any of the company-specific risk be diversified away by investing in both PNM Old and Dow Jones 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 PNM Old and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PNM Old and Dow Jones Industrial, you can compare the effects of market volatilities on PNM Old and Dow Jones 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 PNM Old with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of PNM Old and Dow Jones.
Diversification Opportunities for PNM Old and Dow Jones
Weak diversification
The 3 months correlation between PNM and Dow is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding PNM Old and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and PNM Old 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 PNM Old are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of PNM Old i.e., PNM Old and Dow Jones go up and down completely randomly.
Pair Corralation between PNM Old and Dow Jones
If you would invest 4,270,656 in Dow Jones Industrial on November 5, 2024 and sell it today you would earn a total of 171,535 from holding Dow Jones Industrial or generate 4.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 5.26% |
| Values | Daily Returns |
PNM Old vs. Dow Jones Industrial
Performance |
| Timeline |
PNM Old and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
PNM Old
Pair trading matchups for PNM Old
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with PNM Old and Dow Jones
The main advantage of trading using opposite PNM Old and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PNM Old position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| PNM Old vs. Portland General Electric | PNM Old vs. MGE Energy | PNM Old vs. CMS Energy | PNM Old vs. OGE Energy |
| Dow Jones vs. Fernhill Beverage | Dow Jones vs. Fomento Economico Mexicano | Dow Jones vs. Loud Beverage Group | Dow Jones vs. Diageo PLC ADR |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |