Correlation Between WEC Energy and Hawaiian Electric
Can any of the company-specific risk be diversified away by investing in both WEC Energy and Hawaiian 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 WEC Energy and Hawaiian Electric 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 Hawaiian Electric, you can compare the effects of market volatilities on WEC Energy and Hawaiian 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 WEC Energy with a short position of Hawaiian Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of WEC Energy and Hawaiian Electric.
Diversification Opportunities for WEC Energy and Hawaiian Electric
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between WEC and Hawaiian is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding WEC Energy Group and Hawaiian Electric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hawaiian Electric 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 Hawaiian Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hawaiian Electric has no effect on the direction of WEC Energy i.e., WEC Energy and Hawaiian Electric go up and down completely randomly.
Pair Corralation between WEC Energy and Hawaiian Electric
If you would invest 9,410 in WEC Energy Group on September 3, 2024 and sell it today you would earn a total of 556.00 from holding WEC Energy Group or generate 5.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 5.0% |
| Values | Daily Returns |
WEC Energy Group vs. Hawaiian Electric
Performance |
| Timeline |
| WEC Energy Group |
| Hawaiian Electric |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
WEC Energy and Hawaiian Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WEC Energy and Hawaiian Electric
The main advantage of trading using opposite WEC Energy and Hawaiian Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WEC Energy position performs unexpectedly, Hawaiian 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 Hawaiian Electric will offset losses from the drop in Hawaiian Electric's long position.| 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
Other Complementary Tools
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |