Correlation Between WEC Energy and Portland General
Can any of the company-specific risk be diversified away by investing in both WEC Energy and Portland General 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 Portland General 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 Portland General Electric, you can compare the effects of market volatilities on WEC Energy and Portland General 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 Portland General. Check out your portfolio center. Please also check ongoing floating volatility patterns of WEC Energy and Portland General.
Diversification Opportunities for WEC Energy and Portland General
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between WEC and Portland is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding WEC Energy Group and Portland General Electric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Portland General 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 Portland General. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Portland General Electric has no effect on the direction of WEC Energy i.e., WEC Energy and Portland General go up and down completely randomly.
Pair Corralation between WEC Energy and Portland General
Considering the 90-day investment horizon WEC Energy Group is expected to generate 0.89 times more return on investment than Portland General. However, WEC Energy Group is 1.12 times less risky than Portland General. It trades about 0.15 of its potential returns per unit of risk. Portland General Electric is currently generating about 0.0 per unit of risk. If you would invest 9,283 in WEC Energy Group on September 2, 2024 and sell it today you would earn a total of 822.00 from holding WEC Energy Group or generate 8.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
WEC Energy Group vs. Portland General Electric
Performance |
| Timeline |
| WEC Energy Group |
| Portland General Electric |
WEC Energy and Portland General Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WEC Energy and Portland General
The main advantage of trading using opposite WEC Energy and Portland General positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WEC Energy position performs unexpectedly, Portland General 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 Portland General will offset losses from the drop in Portland General's long position.| WEC Energy vs. Alliant Energy Corp | WEC Energy vs. CMS Energy | WEC Energy vs. Exelon | WEC Energy vs. Evergy, |
| Portland General vs. CMS Energy | Portland General vs. OGE Energy | Portland General vs. DTE Energy | Portland General vs. Ameren Corp |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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