Correlation Between Southern California and Wisconsin Electric
Can any of the company-specific risk be diversified away by investing in both Southern California and Wisconsin Electric 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 Southern California and Wisconsin Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Southern California Gas and Wisconsin Electric Power, you can compare the effects of market volatilities on Southern California and Wisconsin Electric 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 Southern California with a short position of Wisconsin Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Southern California and Wisconsin Electric.
Diversification Opportunities for Southern California and Wisconsin Electric
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Southern and Wisconsin is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Southern California Gas and Wisconsin Electric Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wisconsin Electric Power and Southern California 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 Southern California Gas are associated (or correlated) with Wisconsin Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wisconsin Electric Power has no effect on the direction of Southern California i.e., Southern California and Wisconsin Electric go up and down completely randomly.
Pair Corralation between Southern California and Wisconsin Electric
If you would invest 10,300 in Wisconsin Electric Power on September 2, 2024 and sell it today you would earn a total of 0.00 from holding Wisconsin Electric Power or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Southern California Gas vs. Wisconsin Electric Power
Performance |
| Timeline |
| Southern California Gas |
| Wisconsin Electric Power |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Southern California and Wisconsin Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Southern California and Wisconsin Electric
The main advantage of trading using opposite Southern California and Wisconsin Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Southern California position performs unexpectedly, Wisconsin Electric 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 Wisconsin Electric will offset losses from the drop in Wisconsin Electric's long position.| Southern California vs. Dynagas LNG Partners | Southern California vs. GasLog Partners LP | Southern California vs. GasLog Partners LP | Southern California vs. Genesis Energy LP |
| Wisconsin Electric vs. Wisconsin Electric Power | Wisconsin Electric vs. Union Electric | Wisconsin Electric vs. Southern California Gas | Wisconsin Electric vs. Southern California Gas |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Stocks Directory Find actively traded stocks across global markets | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |