Correlation Between MGE Energy and Evergy,

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

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

Diversification Opportunities for MGE Energy and Evergy,

0.04

Correlation Coefficient

MGE Energy  Evergy,

Significant diversification

The 3 months correlation between MGE and Evergy, is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding MGE Energy and Evergy, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evergy, and MGE Energy 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 MGE Energy 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 MGE Energy i.e., MGE Energy and Evergy, go up and down completely randomly.

Pair Corralation between MGE Energy and Evergy,

Given the investment horizon of 90 days MGE Energy is expected to generate 101.18 times less return on investment than Evergy,. In addition to that, MGE Energy is 1.62 times more volatile than Evergy,. It trades about 0.0 of its total potential returns per unit of risk. Evergy, is currently generating about 0.17 per unit of volatility. If you would invest  6,090  in Evergy, on December 28, 2024 and sell it today you would earn a total of  642.00  from holding Evergy, or generate 10.54% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

MGE Energy  vs.  Evergy,

MGE Energy

Risk-Adjusted Performance

Very Weak

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

Evergy,

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Evergy, are ranked lower than 13 (%) 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.

Pair Trading with MGE Energy and Evergy,

The main advantage of trading using opposite MGE Energy and Evergy, positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MGE Energy 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 MGE Energy 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.