Correlation Between PNM Old and Public Service
Can any of the company-specific risk be diversified away by investing in both PNM Old and Public Service 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 Public Service into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PNM Old and Public Service, you can compare the effects of market volatilities on PNM Old and Public Service 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 Public Service. Check out your portfolio center. Please also check ongoing floating volatility patterns of PNM Old and Public Service.
Diversification Opportunities for PNM Old and Public Service
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between PNM and Public is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding PNM Old and Public Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Public Service 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 Public Service. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Public Service has no effect on the direction of PNM Old i.e., PNM Old and Public Service go up and down completely randomly.
Pair Corralation between PNM Old and Public Service
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 | 4.55% |
| Values | Daily Returns |
PNM Old vs. Public Service
Performance |
| Timeline |
| PNM Old |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Public Service |
PNM Old and Public Service Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PNM Old and Public Service
The main advantage of trading using opposite PNM Old and Public Service positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PNM Old position performs unexpectedly, Public Service 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 Public Service will offset losses from the drop in Public Service's long position.| PNM Old vs. Portland General Electric | PNM Old vs. MGE Energy | PNM Old vs. CMS Energy | PNM Old vs. OGE Energy |
| Public Service vs. WK Kellogg Co | Public Service vs. Copperbank Resources Corp | Public Service vs. Astral Foods Limited | Public Service vs. Ingredion Incorporated |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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