Correlation Between WEC Energy and Evolution Gaming
Can any of the company-specific risk be diversified away by investing in both WEC Energy and Evolution Gaming 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 WEC Energy and Evolution Gaming into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WEC Energy Group and Evolution Gaming Group, you can compare the effects of market volatilities on WEC Energy and Evolution Gaming 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 WEC Energy with a short position of Evolution Gaming. Check out your portfolio center. Please also check ongoing floating volatility patterns of WEC Energy and Evolution Gaming.
Diversification Opportunities for WEC Energy and Evolution Gaming
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between WEC and Evolution is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding WEC Energy Group and Evolution Gaming Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evolution Gaming and WEC 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 WEC Energy Group are associated (or correlated) with Evolution Gaming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evolution Gaming has no effect on the direction of WEC Energy i.e., WEC Energy and Evolution Gaming go up and down completely randomly.
Pair Corralation between WEC Energy and Evolution Gaming
Considering the 90-day investment horizon WEC Energy Group is expected to generate 0.54 times more return on investment than Evolution Gaming. However, WEC Energy Group is 1.87 times less risky than Evolution Gaming. It trades about 0.09 of its potential returns per unit of risk. Evolution Gaming Group is currently generating about -0.05 per unit of risk. If you would invest 8,099 in WEC Energy Group on August 25, 2024 and sell it today you would earn a total of 1,967 from holding WEC Energy Group or generate 24.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
WEC Energy Group vs. Evolution Gaming Group
Performance |
| Timeline |
| WEC Energy Group |
| Evolution Gaming |
WEC Energy and Evolution Gaming Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WEC Energy and Evolution Gaming
The main advantage of trading using opposite WEC Energy and Evolution Gaming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WEC Energy position performs unexpectedly, Evolution Gaming 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 Evolution Gaming will offset losses from the drop in Evolution Gaming's long position.| WEC Energy vs. Alliant Energy Corp | WEC Energy vs. CMS Energy | WEC Energy vs. Exelon | WEC Energy vs. Evergy, |
| Evolution Gaming vs. Real Luck Group | Evolution Gaming vs. Betmakers Technology Group | Evolution Gaming vs. Jackpot Digital |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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