Correlation Between Public Service and TXNM Energy,

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

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

Diversification Opportunities for Public Service and TXNM Energy,

-0.36

Correlation Coefficient

Public Service  TXNM Energy,

Very good diversification

The 3 months correlation between Public and TXNM is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Public Service Enterprise and TXNM Energy, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TXNM Energy, and Public Service 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 Public Service Enterprise are associated (or correlated) with TXNM Energy,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TXNM Energy, has no effect on the direction of Public Service i.e., Public Service and TXNM Energy, go up and down completely randomly.

Pair Corralation between Public Service and TXNM Energy,

Considering the 90-day investment horizon Public Service Enterprise is expected to under-perform the TXNM Energy,. But the stock apears to be less risky and, when comparing its historical volatility, Public Service Enterprise is 1.16 times less risky than TXNM Energy,. The stock trades about -0.03 of its potential returns per unit of risk. The TXNM Energy, is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  4,856  in TXNM Energy, on December 28, 2024 and sell it today you would earn a total of  513.00  from holding TXNM Energy, or generate 10.56% return on investment over 90 days.

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

Public Service Enterprise  vs.  TXNM Energy,

Public Service Enterprise

Risk-Adjusted Performance

Very Weak

Over the last 90 days Public Service Enterprise has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Public Service is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

TXNM Energy,

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in TXNM Energy, are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting basic indicators, TXNM Energy, may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Public Service and TXNM Energy,

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

The idea behind Public Service Enterprise and TXNM 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.

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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 Commodity Directory module to find actively traded commodities issued by global exchanges.