Correlation Between PNM Resources and Evergy,
Can any of the company-specific risk be diversified away by investing in both PNM Resources and Evergy, 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 Evergy, into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PNM Resources and Evergy,, you can compare the effects of market volatilities on PNM Resources and Evergy, 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 Evergy,. Check out your portfolio center. Please also check ongoing floating volatility patterns of PNM Resources and Evergy,.
Diversification Opportunities for PNM Resources and Evergy,
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between PNM and Evergy, is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding PNM Resources and Evergy, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evergy, 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 Evergy,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evergy, has no effect on the direction of PNM Resources i.e., PNM Resources and Evergy, go up and down completely randomly.
Pair Corralation between PNM Resources and Evergy,
Considering the 90-day investment horizon PNM Resources is expected to under-perform the Evergy,. But the stock apears to be less risky and, when comparing its historical volatility, PNM Resources is 1.2 times less risky than Evergy,. The stock trades about -0.01 of its potential returns per unit of risk. The Evergy, is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 5,402 in Evergy, on August 23, 2024 and sell it today you would earn a total of 1,054 from holding Evergy, or generate 19.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 93.35% |
| Values | Daily Returns |
PNM Resources vs. Evergy,
Performance |
| Timeline |
| PNM Resources |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
| Evergy, |
PNM Resources and Evergy, Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PNM Resources and Evergy,
The main advantage of trading using opposite PNM Resources and Evergy, positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PNM Resources position performs unexpectedly, Evergy, 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 Evergy, will offset losses from the drop in Evergy,'s long position.| PNM Resources vs. Portland General Electric | PNM Resources vs. MGE Energy | PNM Resources vs. CMS Energy | PNM Resources vs. OGE Energy |
| 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
Other Complementary Tools
| Transaction History View history of all your transactions and understand their impact on performance | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals |