Correlation Between WEC Energy and Juniata Valley
Can any of the company-specific risk be diversified away by investing in both WEC Energy and Juniata Valley 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 Juniata Valley 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 Juniata Valley Financial, you can compare the effects of market volatilities on WEC Energy and Juniata Valley 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 Juniata Valley. Check out your portfolio center. Please also check ongoing floating volatility patterns of WEC Energy and Juniata Valley.
Diversification Opportunities for WEC Energy and Juniata Valley
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between WEC and Juniata is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding WEC Energy Group and Juniata Valley Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Juniata Valley Financial 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 Juniata Valley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Juniata Valley Financial has no effect on the direction of WEC Energy i.e., WEC Energy and Juniata Valley go up and down completely randomly.
Pair Corralation between WEC Energy and Juniata Valley
Considering the 90-day investment horizon WEC Energy Group is expected to generate 0.3 times more return on investment than Juniata Valley. However, WEC Energy Group is 3.33 times less risky than Juniata Valley. It trades about 0.05 of its potential returns per unit of risk. Juniata Valley Financial is currently generating about 0.01 per unit of risk. If you would invest 8,533 in WEC Energy Group on August 31, 2024 and sell it today you would earn a total of 1,572 from holding WEC Energy Group or generate 18.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 86.1% |
| Values | Daily Returns |
WEC Energy Group vs. Juniata Valley Financial
Performance |
| Timeline |
| WEC Energy Group |
| Juniata Valley Financial |
WEC Energy and Juniata Valley Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WEC Energy and Juniata Valley
The main advantage of trading using opposite WEC Energy and Juniata Valley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WEC Energy position performs unexpectedly, Juniata Valley 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 Juniata Valley will offset losses from the drop in Juniata Valley's long position.| WEC Energy vs. Alliant Energy Corp | WEC Energy vs. CMS Energy | WEC Energy vs. Exelon | WEC Energy vs. Evergy, |
| Juniata Valley vs. FNB Inc | Juniata Valley vs. Apollo Bancorp | Juniata Valley vs. Commercial National Financial | Juniata Valley vs. Eastern Michigan Financial |
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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