Correlation Between Nextera Energy and Evergy,

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

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

Diversification Opportunities for Nextera Energy and Evergy,

-0.14

Correlation Coefficient

Nextera Energy  Evergy,

Good diversification

The 3 months correlation between Nextera and Evergy, is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Nextera Energy and Evergy, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evergy, and Nextera 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 Nextera 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 Nextera Energy i.e., Nextera Energy and Evergy, go up and down completely randomly.

Pair Corralation between Nextera Energy and Evergy,

Considering the 90-day investment horizon Nextera Energy is expected to under-perform the Evergy,. In addition to that, Nextera Energy is 1.77 times more volatile than Evergy,. It trades about -0.18 of its total potential returns per unit of risk. Evergy, is currently generating about 0.09 per unit of volatility. If you would invest  6,034  in Evergy, on October 26, 2024 and sell it today you would earn a total of  272.00  from holding Evergy, or generate 4.51% return on investment over 90 days.

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

Nextera Energy  vs.  Evergy,

Nextera Energy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nextera Energy has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Evergy,

Risk-Adjusted Performance

6 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Evergy, are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Evergy, is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Nextera Energy and Evergy,

The main advantage of trading using opposite Nextera Energy and Evergy, positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nextera 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 Nextera 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.