Correlation Between PNM Resources and CK Infrastructure
Can any of the company-specific risk be diversified away by investing in both PNM Resources and CK Infrastructure 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 PNM Resources and CK Infrastructure into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PNM Resources and CK Infrastructure Holdings, you can compare the effects of market volatilities on PNM Resources and CK Infrastructure 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 PNM Resources with a short position of CK Infrastructure. Check out your portfolio center. Please also check ongoing floating volatility patterns of PNM Resources and CK Infrastructure.
Diversification Opportunities for PNM Resources and CK Infrastructure
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between PNM and CKISF is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding PNM Resources and CK Infrastructure Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CK Infrastructure and PNM Resources 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 PNM Resources are associated (or correlated) with CK Infrastructure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CK Infrastructure has no effect on the direction of PNM Resources i.e., PNM Resources and CK Infrastructure go up and down completely randomly.
Pair Corralation between PNM Resources and CK Infrastructure
Considering the 90-day investment horizon PNM Resources is expected to generate 1.19 times less return on investment than CK Infrastructure. In addition to that, PNM Resources is 1.81 times more volatile than CK Infrastructure Holdings. It trades about 0.05 of its total potential returns per unit of risk. CK Infrastructure Holdings is currently generating about 0.11 per unit of volatility. If you would invest 576.00 in CK Infrastructure Holdings on March 14, 2024 and sell it today you would earn a total of 21.00 from holding CK Infrastructure Holdings or generate 3.65% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
PNM Resources vs. CK Infrastructure Holdings
Performance |
Timeline |
PNM Resources |
CK Infrastructure |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
PNM Resources and CK Infrastructure Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with PNM Resources and CK Infrastructure
The main advantage of trading using opposite PNM Resources and CK Infrastructure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PNM Resources position performs unexpectedly, CK Infrastructure 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 CK Infrastructure will offset losses from the drop in CK Infrastructure's long position.PNM Resources vs. MGE Energy | PNM Resources vs. CMS Energy | PNM Resources vs. DTE Energy | PNM Resources vs. Ameren Corp |
CK Infrastructure vs. PNM Resources | CK Infrastructure vs. Pinnacle West Capital | CK Infrastructure vs. Enel Chile SA | CK Infrastructure vs. WEC Energy Group |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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