Correlation Between PNM Old and Massachusetts Electric
Can any of the company-specific risk be diversified away by investing in both PNM Old and Massachusetts Electric 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 Massachusetts Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PNM Old and Massachusetts Electric, you can compare the effects of market volatilities on PNM Old and Massachusetts Electric 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 Massachusetts Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of PNM Old and Massachusetts Electric.
Diversification Opportunities for PNM Old and Massachusetts Electric
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between PNM and Massachusetts is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding PNM Old and Massachusetts Electric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Massachusetts Electric 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 Massachusetts Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Massachusetts Electric has no effect on the direction of PNM Old i.e., PNM Old and Massachusetts Electric go up and down completely randomly.
Pair Corralation between PNM Old and Massachusetts Electric
If you would invest (100.00) in Massachusetts Electric on October 11, 2024 and sell it today you would earn a total of 100.00 from holding Massachusetts Electric or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
PNM Old vs. Massachusetts Electric
Performance |
| Timeline |
| PNM Old |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Massachusetts Electric |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
PNM Old and Massachusetts Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PNM Old and Massachusetts Electric
The main advantage of trading using opposite PNM Old and Massachusetts Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PNM Old position performs unexpectedly, Massachusetts Electric 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 Massachusetts Electric will offset losses from the drop in Massachusetts Electric's long position.| PNM Old vs. Portland General Electric | PNM Old vs. MGE Energy | PNM Old vs. CMS Energy | PNM Old vs. OGE Energy |
| Massachusetts Electric vs. Omni Health | Massachusetts Electric vs. Regeneron Pharmaceuticals | Massachusetts Electric vs. Valneva SE ADR | Massachusetts Electric vs. Univest Pennsylvania |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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