Correlation Between FirstEnergy and Evergy,

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

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

Diversification Opportunities for FirstEnergy and Evergy,

-0.3

Correlation Coefficient

FirstEnergy  Evergy,

Very good diversification

The 3 months correlation between FirstEnergy and Evergy, is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding FirstEnergy and Evergy, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evergy, and FirstEnergy 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 FirstEnergy 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 FirstEnergy i.e., FirstEnergy and Evergy, go up and down completely randomly.

Pair Corralation between FirstEnergy and Evergy,

Allowing for the 90-day total investment horizon FirstEnergy is expected to under-perform the Evergy,. But the stock apears to be less risky and, when comparing its historical volatility, FirstEnergy is 1.01 times less risky than Evergy,. The stock trades about -0.03 of its potential returns per unit of risk. The Evergy, is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  5,853  in Evergy, on August 30, 2024 and sell it today you would earn a total of  647.00  from holding Evergy, or generate 11.05% return on investment over 90 days.

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

FirstEnergy  vs.  Evergy,

FirstEnergy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FirstEnergy has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, FirstEnergy is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Evergy,

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Evergy, are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Evergy, may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with FirstEnergy and Evergy,

The main advantage of trading using opposite FirstEnergy and Evergy, positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FirstEnergy 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 FirstEnergy 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.