Correlation Between Allient and WEC Energy
Can any of the company-specific risk be diversified away by investing in both Allient and WEC 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 Allient and WEC Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Allient and WEC Energy Group, you can compare the effects of market volatilities on Allient and WEC 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 Allient with a short position of WEC Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allient and WEC Energy.
Diversification Opportunities for Allient and WEC Energy
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Allient and WEC is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Allient and WEC Energy Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WEC Energy Group and Allient 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 Allient are associated (or correlated) with WEC Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WEC Energy Group has no effect on the direction of Allient i.e., Allient and WEC Energy go up and down completely randomly.
Pair Corralation between Allient and WEC Energy
Given the investment horizon of 90 days Allient is expected to generate 2.53 times more return on investment than WEC Energy. However, Allient is 2.53 times more volatile than WEC Energy Group. It trades about 0.19 of its potential returns per unit of risk. WEC Energy Group is currently generating about 0.22 per unit of risk. If you would invest 2,361 in Allient on October 22, 2024 and sell it today you would earn a total of 219.00 from holding Allient or generate 9.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Allient vs. WEC Energy Group
Performance |
| Timeline |
| Allient |
| WEC Energy Group |
Allient and WEC Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allient and WEC Energy
The main advantage of trading using opposite Allient and WEC Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allient position performs unexpectedly, WEC 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 WEC Energy will offset losses from the drop in WEC Energy's long position.| Allient vs. Merit Medical Systems | Allient vs. Teleflex Incorporated | Allient vs. Air Lease | Allient vs. enVVeno Medical Corp |
| WEC Energy vs. Alliant Energy Corp | WEC Energy vs. CMS Energy | WEC Energy vs. Exelon | WEC Energy vs. Evergy, |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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