Correlation Between PNM Resources and Empresa Distribuidora
Can any of the company-specific risk be diversified away by investing in both PNM Resources and Empresa Distribuidora 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 Empresa Distribuidora into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PNM Resources and Empresa Distribuidora y, you can compare the effects of market volatilities on PNM Resources and Empresa Distribuidora 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 Empresa Distribuidora. Check out your portfolio center. Please also check ongoing floating volatility patterns of PNM Resources and Empresa Distribuidora.
Diversification Opportunities for PNM Resources and Empresa Distribuidora
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between PNM and Empresa is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding PNM Resources and Empresa Distribuidora y in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Empresa Distribuidora 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 Empresa Distribuidora. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Empresa Distribuidora has no effect on the direction of PNM Resources i.e., PNM Resources and Empresa Distribuidora go up and down completely randomly.
Pair Corralation between PNM Resources and Empresa Distribuidora
If you would invest 2,780 in Empresa Distribuidora y on August 31, 2024 and sell it today you would earn a total of 1,049 from holding Empresa Distribuidora y or generate 37.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 4.55% |
| Values | Daily Returns |
PNM Resources vs. Empresa Distribuidora y
Performance |
| Timeline |
| PNM Resources |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
| Empresa Distribuidora |
PNM Resources and Empresa Distribuidora Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PNM Resources and Empresa Distribuidora
The main advantage of trading using opposite PNM Resources and Empresa Distribuidora positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PNM Resources position performs unexpectedly, Empresa Distribuidora 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 Empresa Distribuidora will offset losses from the drop in Empresa Distribuidora's long position.| PNM Resources vs. Portland General Electric | PNM Resources vs. MGE Energy | PNM Resources vs. CMS Energy | PNM Resources vs. OGE Energy |
| Empresa Distribuidora vs. Centrais Electricas Brasileiras | Empresa Distribuidora vs. Enel Chile SA | Empresa Distribuidora vs. Korea Electric Power | Empresa Distribuidora vs. Genie 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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