Correlation Between WEC Energy and Radcom
Can any of the company-specific risk be diversified away by investing in both WEC Energy and Radcom 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 Radcom 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 Radcom, you can compare the effects of market volatilities on WEC Energy and Radcom 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 Radcom. Check out your portfolio center. Please also check ongoing floating volatility patterns of WEC Energy and Radcom.
Diversification Opportunities for WEC Energy and Radcom
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between WEC and Radcom is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding WEC Energy Group and Radcom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Radcom 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 Radcom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Radcom has no effect on the direction of WEC Energy i.e., WEC Energy and Radcom go up and down completely randomly.
Pair Corralation between WEC Energy and Radcom
Considering the 90-day investment horizon WEC Energy Group is expected to generate 0.21 times more return on investment than Radcom. However, WEC Energy Group is 4.76 times less risky than Radcom. It trades about -0.25 of its potential returns per unit of risk. Radcom is currently generating about -0.06 per unit of risk. If you would invest 9,709 in WEC Energy Group on October 7, 2024 and sell it today you would lose (330.00) from holding WEC Energy Group or give up 3.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
WEC Energy Group vs. Radcom
Performance |
| Timeline |
| WEC Energy Group |
| Radcom |
WEC Energy and Radcom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WEC Energy and Radcom
The main advantage of trading using opposite WEC Energy and Radcom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WEC Energy position performs unexpectedly, Radcom 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 Radcom will offset losses from the drop in Radcom's long position.| WEC Energy vs. Alliant Energy Corp | WEC Energy vs. CMS Energy | WEC Energy vs. Exelon | WEC Energy vs. Evergy, |
| Radcom vs. Shenandoah Telecommunications Co | Radcom vs. Anterix | Radcom vs. SK Telecom Co | Radcom vs. Liberty Broadband Srs |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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