Correlation Between TXNM Energy, and FirstEnergy
Can any of the company-specific risk be diversified away by investing in both TXNM Energy, and FirstEnergy 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 TXNM Energy, and FirstEnergy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TXNM Energy, and FirstEnergy, you can compare the effects of market volatilities on TXNM Energy, and FirstEnergy 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 TXNM Energy, with a short position of FirstEnergy. Check out your portfolio center. Please also check ongoing floating volatility patterns of TXNM Energy, and FirstEnergy.
Diversification Opportunities for TXNM Energy, and FirstEnergy
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between TXNM and FirstEnergy is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding TXNM Energy, and FirstEnergy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FirstEnergy and TXNM Energy, 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 TXNM Energy, are associated (or correlated) with FirstEnergy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FirstEnergy has no effect on the direction of TXNM Energy, i.e., TXNM Energy, and FirstEnergy go up and down completely randomly.
Pair Corralation between TXNM Energy, and FirstEnergy
Given the investment horizon of 90 days TXNM Energy, is expected to generate 1.15 times less return on investment than FirstEnergy. In addition to that, TXNM Energy, is 1.24 times more volatile than FirstEnergy. It trades about 0.07 of its total potential returns per unit of risk. FirstEnergy is currently generating about 0.09 per unit of volatility. If you would invest 3,916 in FirstEnergy on October 20, 2024 and sell it today you would earn a total of 73.00 from holding FirstEnergy or generate 1.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
TXNM Energy, vs. FirstEnergy
Performance |
| Timeline |
| TXNM Energy, |
| FirstEnergy |
TXNM Energy, and FirstEnergy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TXNM Energy, and FirstEnergy
The main advantage of trading using opposite TXNM Energy, and FirstEnergy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TXNM Energy, position performs unexpectedly, FirstEnergy 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 FirstEnergy will offset losses from the drop in FirstEnergy's long position.| TXNM Energy, vs. Emerson Radio | TXNM Energy, vs. Mesa Air Group | TXNM Energy, vs. flyExclusive, | TXNM Energy, vs. National CineMedia |
| FirstEnergy vs. CenterPoint Energy | FirstEnergy vs. Pinnacle West Capital | FirstEnergy vs. Edison International | FirstEnergy vs. Public Service Enterprise |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |