Correlation Between WEC Energy and INNOVATEC SPA
Can any of the company-specific risk be diversified away by investing in both WEC Energy and INNOVATEC SPA 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 INNOVATEC SPA 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 INNOVATEC SPA, you can compare the effects of market volatilities on WEC Energy and INNOVATEC SPA 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 INNOVATEC SPA. Check out your portfolio center. Please also check ongoing floating volatility patterns of WEC Energy and INNOVATEC SPA.
Diversification Opportunities for WEC Energy and INNOVATEC SPA
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between WEC and INNOVATEC is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding WEC Energy Group and INNOVATEC SPA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INNOVATEC 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 INNOVATEC SPA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INNOVATEC SPA has no effect on the direction of WEC Energy i.e., WEC Energy and INNOVATEC SPA go up and down completely randomly.
Pair Corralation between WEC Energy and INNOVATEC SPA
Assuming the 90 days horizon WEC Energy Group is expected to generate 0.09 times more return on investment than INNOVATEC SPA. However, WEC Energy Group is 11.46 times less risky than INNOVATEC SPA. It trades about 0.23 of its potential returns per unit of risk. INNOVATEC SPA is currently generating about -0.16 per unit of risk. If you would invest 8,936 in WEC Energy Group on October 21, 2024 and sell it today you would earn a total of 584.00 from holding WEC Energy Group or generate 6.54% 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. INNOVATEC SPA
Performance |
| Timeline |
| WEC Energy Group |
| INNOVATEC SPA |
WEC Energy and INNOVATEC SPA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WEC Energy and INNOVATEC SPA
The main advantage of trading using opposite WEC Energy and INNOVATEC SPA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WEC Energy position performs unexpectedly, INNOVATEC SPA 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 INNOVATEC SPA will offset losses from the drop in INNOVATEC SPA's long position.| WEC Energy vs. Charter Communications | WEC Energy vs. Chengdu PUTIAN Telecommunications | WEC Energy vs. TELECOM ITALIA | WEC Energy vs. Cleanaway Waste Management |
| INNOVATEC SPA vs. Duke Energy | INNOVATEC SPA vs. WEC Energy Group | INNOVATEC SPA vs. ENDESA ADR 12 | INNOVATEC SPA vs. CMS Energy |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
Other Complementary Tools
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |