Correlation Between PNM Old and NSTAR Electric
Can any of the company-specific risk be diversified away by investing in both PNM Old and NSTAR 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 NSTAR 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 NSTAR Electric, you can compare the effects of market volatilities on PNM Old and NSTAR 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 NSTAR Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of PNM Old and NSTAR Electric.
Diversification Opportunities for PNM Old and NSTAR Electric
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between PNM and NSTAR is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding PNM Old and NSTAR Electric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NSTAR 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 NSTAR Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NSTAR Electric has no effect on the direction of PNM Old i.e., PNM Old and NSTAR Electric go up and down completely randomly.
Pair Corralation between PNM Old and NSTAR Electric
If you would invest 4,325 in PNM Old on October 11, 2024 and sell it today you would earn a total of 0.00 from holding PNM Old 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 Old vs. NSTAR Electric
Performance |
| Timeline |
| PNM Old |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| NSTAR Electric |
PNM Old and NSTAR Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PNM Old and NSTAR Electric
The main advantage of trading using opposite PNM Old and NSTAR Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PNM Old position performs unexpectedly, NSTAR 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 NSTAR Electric will offset losses from the drop in NSTAR 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 |
| NSTAR Electric vs. GameStop Corp | NSTAR Electric vs. Paysafe | NSTAR Electric vs. Asure Software | NSTAR Electric vs. Take Two Interactive Software |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk |