Correlation Between WEC Energy and Stevanato Group
Can any of the company-specific risk be diversified away by investing in both WEC Energy and Stevanato Group 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 Stevanato Group 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 Stevanato Group SpA, you can compare the effects of market volatilities on WEC Energy and Stevanato Group 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 Stevanato Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of WEC Energy and Stevanato Group.
Diversification Opportunities for WEC Energy and Stevanato Group
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between WEC and Stevanato is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding WEC Energy Group and Stevanato Group SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stevanato Group SpA 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 Stevanato Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stevanato Group SpA has no effect on the direction of WEC Energy i.e., WEC Energy and Stevanato Group go up and down completely randomly.
Pair Corralation between WEC Energy and Stevanato Group
Considering the 90-day investment horizon WEC Energy is expected to generate 1.11 times less return on investment than Stevanato Group. But when comparing it to its historical volatility, WEC Energy Group is 5.0 times less risky than Stevanato Group. It trades about 0.37 of its potential returns per unit of risk. Stevanato Group SpA is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,880 in Stevanato Group SpA on August 30, 2024 and sell it today you would earn a total of 120.00 from holding Stevanato Group SpA or generate 6.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
WEC Energy Group vs. Stevanato Group SpA
Performance |
| Timeline |
| WEC Energy Group |
| Stevanato Group SpA |
WEC Energy and Stevanato Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WEC Energy and Stevanato Group
The main advantage of trading using opposite WEC Energy and Stevanato Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WEC Energy position performs unexpectedly, Stevanato Group 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 Stevanato Group will offset losses from the drop in Stevanato Group's long position.| WEC Energy vs. Alliant Energy Corp | WEC Energy vs. CMS Energy | WEC Energy vs. Exelon | WEC Energy vs. Evergy, |
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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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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