Correlation Between Evergy, and DTE Energy

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

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

Diversification Opportunities for Evergy, and DTE Energy

0.88

Correlation Coefficient

Evergy,  DTE Energy

Very poor diversification

The 3 months correlation between Evergy, and DTE is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Evergy, and DTE Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DTE Energy and Evergy, 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 Evergy, are associated (or correlated) with DTE Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DTE Energy has no effect on the direction of Evergy, i.e., Evergy, and DTE Energy go up and down completely randomly.

Pair Corralation between Evergy, and DTE Energy

Given the investment horizon of 90 days Evergy, is expected to generate 1.23 times less return on investment than DTE Energy. But when comparing it to its historical volatility, Evergy, is 1.12 times less risky than DTE Energy. It trades about 0.18 of its potential returns per unit of risk. DTE Energy is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  11,958  in DTE Energy on December 28, 2024 and sell it today you would earn a total of  1,699  from holding DTE Energy or generate 14.21% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Evergy,  vs.  DTE Energy

Evergy,

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Evergy, are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Evergy, may actually be approaching a critical reversion point that can send shares even higher in April 2025.

DTE Energy

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in DTE Energy are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, DTE Energy exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Evergy, and DTE Energy

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

The idea behind Evergy, and DTE Energy 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.

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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.