Correlation Between WEC Energy and American Environmental
Can any of the company-specific risk be diversified away by investing in both WEC Energy and American Environmental 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 American Environmental 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 American Environmental, you can compare the effects of market volatilities on WEC Energy and American Environmental 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 American Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of WEC Energy and American Environmental.
Diversification Opportunities for WEC Energy and American Environmental
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between WEC and American is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding WEC Energy Group and American Environmental in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Environmental 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 American Environmental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Environmental has no effect on the direction of WEC Energy i.e., WEC Energy and American Environmental go up and down completely randomly.
Pair Corralation between WEC Energy and American Environmental
If you would invest 8,966 in WEC Energy Group on September 5, 2024 and sell it today you would earn a total of 1,000.00 from holding WEC Energy Group or generate 11.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
WEC Energy Group vs. American Environmental
Performance |
| Timeline |
| WEC Energy Group |
| American Environmental |
WEC Energy and American Environmental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WEC Energy and American Environmental
The main advantage of trading using opposite WEC Energy and American Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WEC Energy position performs unexpectedly, American Environmental 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 American Environmental will offset losses from the drop in American Environmental's long position.| WEC Energy vs. Alliant Energy Corp | WEC Energy vs. CMS Energy | WEC Energy vs. Exelon | WEC Energy vs. Evergy, |
| American Environmental vs. Apple Inc | American Environmental vs. Microsoft | American Environmental vs. Amazon Inc | American Environmental vs. Alphabet Inc Class C |
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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