Correlation Between Empresa Distribuidora and PNM Old

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

By analyzing existing cross correlation between Empresa Distribuidora y and PNM Old, you can compare the effects of market volatilities on Empresa Distribuidora and PNM Old 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 Empresa Distribuidora with a short position of PNM Old. Check out your portfolio center. Please also check ongoing floating volatility patterns of Empresa Distribuidora and PNM Old.

Diversification Opportunities for Empresa Distribuidora and PNM Old

0.0

Correlation Coefficient

Empresa Distribuidora  PNM Old

Pay attention - limited upside

The 3 months correlation between Empresa and PNM is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Empresa Distribuidora y and PNM Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PNM Old and Empresa Distribuidora 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 Empresa Distribuidora y are associated (or correlated) with PNM Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PNM Old has no effect on the direction of Empresa Distribuidora i.e., Empresa Distribuidora and PNM Old go up and down completely randomly.

Pair Corralation between Empresa Distribuidora and PNM Old

If you would invest (100.00) in PNM Old on December 1, 2024 and sell it today you would earn a total of  100.00  from holding PNM Old 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

Empresa Distribuidora y  vs.  PNM Old

Empresa Distribuidora

Risk-Adjusted Performance

Very Weak

Over the last 90 days Empresa Distribuidora y has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

PNM Old

Risk-Adjusted Performance

Very Weak

Over the last 90 days PNM Old has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, PNM Old is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Empresa Distribuidora and PNM Old

The main advantage of trading using opposite Empresa Distribuidora and PNM Old positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Empresa Distribuidora position performs unexpectedly, PNM Old 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 PNM Old will offset losses from the drop in PNM Old's long position.

The idea behind Empresa Distribuidora y and PNM Old 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.