Correlation Between WEC Energy and Scholastic
Can any of the company-specific risk be diversified away by investing in both WEC Energy and Scholastic 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 Scholastic 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 Scholastic, you can compare the effects of market volatilities on WEC Energy and Scholastic 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 Scholastic. Check out your portfolio center. Please also check ongoing floating volatility patterns of WEC Energy and Scholastic.
Diversification Opportunities for WEC Energy and Scholastic
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between WEC and Scholastic is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding WEC Energy Group and Scholastic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scholastic 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 Scholastic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scholastic has no effect on the direction of WEC Energy i.e., WEC Energy and Scholastic go up and down completely randomly.
Pair Corralation between WEC Energy and Scholastic
Considering the 90-day investment horizon WEC Energy is expected to generate 1.04 times less return on investment than Scholastic. But when comparing it to its historical volatility, WEC Energy Group is 2.82 times less risky than Scholastic. It trades about 0.37 of its potential returns per unit of risk. Scholastic is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 2,510 in Scholastic on August 30, 2024 and sell it today you would earn a total of 185.00 from holding Scholastic or generate 7.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
WEC Energy Group vs. Scholastic
Performance |
| Timeline |
| WEC Energy Group |
| Scholastic |
WEC Energy and Scholastic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WEC Energy and Scholastic
The main advantage of trading using opposite WEC Energy and Scholastic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WEC Energy position performs unexpectedly, Scholastic 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 Scholastic will offset losses from the drop in Scholastic's long position.| WEC Energy vs. Alliant Energy Corp | WEC Energy vs. CMS Energy | WEC Energy vs. Exelon | WEC Energy vs. Evergy, |
| Scholastic vs. John Wiley Sons | Scholastic vs. Pearson PLC ADR | Scholastic vs. New York Times | Scholastic vs. Lee Enterprises Incorporated |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
Other Complementary Tools
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios |