Correlation Between Evergy, and PNM Old

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

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

Diversification Opportunities for Evergy, and PNM Old

0.0

Correlation Coefficient

Evergy,  PNM Old

Pay attention - limited upside

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

Pair Corralation between Evergy, and PNM Old

If you would invest  6,070  in Evergy, on December 21, 2024 and sell it today you would earn a total of  727.00  from holding Evergy, or generate 11.98% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Evergy,  vs.  PNM Old

Evergy,

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Evergy, are ranked lower than 16 (%) 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.

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 latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Evergy, and PNM Old

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

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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.