Correlation Between PNM Resources and Centrais Electricas
Can any of the company-specific risk be diversified away by investing in both PNM Resources and Centrais Electricas 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 Resources and Centrais Electricas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PNM Resources and Centrais Electricas Brasileiras, you can compare the effects of market volatilities on PNM Resources and Centrais Electricas 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 Resources with a short position of Centrais Electricas. Check out your portfolio center. Please also check ongoing floating volatility patterns of PNM Resources and Centrais Electricas.
Diversification Opportunities for PNM Resources and Centrais Electricas
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between PNM and Centrais is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding PNM Resources and Centrais Electricas Brasileira in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centrais Electricas and PNM Resources 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 Resources are associated (or correlated) with Centrais Electricas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centrais Electricas has no effect on the direction of PNM Resources i.e., PNM Resources and Centrais Electricas go up and down completely randomly.
Pair Corralation between PNM Resources and Centrais Electricas
If you would invest 4,325 in PNM Resources on August 28, 2024 and sell it today you would earn a total of 0.00 from holding PNM Resources or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
PNM Resources vs. Centrais Electricas Brasileira
Performance |
| Timeline |
| PNM Resources |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
| Centrais Electricas |
PNM Resources and Centrais Electricas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PNM Resources and Centrais Electricas
The main advantage of trading using opposite PNM Resources and Centrais Electricas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PNM Resources position performs unexpectedly, Centrais Electricas 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 Centrais Electricas will offset losses from the drop in Centrais Electricas' long position.| PNM Resources vs. Portland General Electric | PNM Resources vs. MGE Energy | PNM Resources vs. CMS Energy | PNM Resources vs. OGE Energy |
| Centrais Electricas vs. Genie Energy | Centrais Electricas vs. Central Puerto SA | Centrais Electricas vs. Korea Electric Power | Centrais Electricas vs. Empresa Distribuidora y |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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