Correlation Between WEC Energy and Sellas Life
Can any of the company-specific risk be diversified away by investing in both WEC Energy and Sellas Life 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 Sellas Life 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 Sellas Life Sciences, you can compare the effects of market volatilities on WEC Energy and Sellas Life 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 Sellas Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of WEC Energy and Sellas Life.
Diversification Opportunities for WEC Energy and Sellas Life
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between WEC and Sellas is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding WEC Energy Group and Sellas Life Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sellas Life Sciences 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 Sellas Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sellas Life Sciences has no effect on the direction of WEC Energy i.e., WEC Energy and Sellas Life go up and down completely randomly.
Pair Corralation between WEC Energy and Sellas Life
Considering the 90-day investment horizon WEC Energy is expected to generate 1.55 times less return on investment than Sellas Life. But when comparing it to its historical volatility, WEC Energy Group is 5.0 times less risky than Sellas Life. It trades about 0.02 of its potential returns per unit of risk. Sellas Life Sciences is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 242.00 in Sellas Life Sciences on September 3, 2024 and sell it today you would lose (129.00) from holding Sellas Life Sciences or give up 53.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
WEC Energy Group vs. Sellas Life Sciences
Performance |
| Timeline |
| WEC Energy Group |
| Sellas Life Sciences |
WEC Energy and Sellas Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WEC Energy and Sellas Life
The main advantage of trading using opposite WEC Energy and Sellas Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WEC Energy position performs unexpectedly, Sellas Life 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 Sellas Life will offset losses from the drop in Sellas Life's long position.| WEC Energy vs. Alliant Energy Corp | WEC Energy vs. CMS Energy | WEC Energy vs. Exelon | WEC Energy vs. Evergy, |
| Sellas Life vs. NLS Pharmaceutics AG | Sellas Life vs. Mereo BioPharma Group | Sellas Life vs. Day One Biopharmaceuticals | Sellas Life vs. Reviva Pharmaceuticals Holdings |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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