Correlation Between American Electric and Evergy,

Can any of the company-specific risk be diversified away by investing in both American Electric 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 American Electric and Evergy, into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between American Electric Power and Evergy,, you can compare the effects of market volatilities on American Electric 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 American Electric with a short position of Evergy,. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Electric and Evergy,.

Diversification Opportunities for American Electric and Evergy,

0.0

Correlation Coefficient

American Electric  Evergy,

Pay attention - limited upside

The 3 months correlation between American and Evergy, is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding American Electric Power and Evergy, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evergy, and American Electric 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 American Electric Power 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 American Electric i.e., American Electric and Evergy, go up and down completely randomly.

Pair Corralation between American Electric and Evergy,

Considering the 90-day investment horizon American Electric Power is expected to under-perform the Evergy,. In addition to that, American Electric is 1.22 times more volatile than Evergy,. It trades about -0.16 of its total potential returns per unit of risk. Evergy, is currently generating about -0.15 per unit of volatility. If you would invest  6,236  in Evergy, on October 11, 2024 and sell it today you would lose (145.00) from holding Evergy, or give up 2.33% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

American Electric Power  vs.  Evergy,

American Electric Power

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days American Electric Power has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable technical and fundamental indicators, American Electric is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Evergy,

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Evergy, are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Evergy, is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with American Electric and Evergy,

The main advantage of trading using opposite American Electric and Evergy, positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Electric 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.

The idea behind American Electric Power and Evergy, pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..