Correlation Between WEC Energy and ANTA SPORTS

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Can any of the company-specific risk be diversified away by investing in both WEC Energy and ANTA SPORTS 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 ANTA SPORTS 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 ANTA SPORTS PRODUCT, you can compare the effects of market volatilities on WEC Energy and ANTA SPORTS 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 ANTA SPORTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of WEC Energy and ANTA SPORTS.

Diversification Opportunities for WEC Energy and ANTA SPORTS

-0.54
  Correlation Coefficient

Excellent diversification

The 3 months correlation between WEC and ANTA is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding WEC Energy Group and ANTA SPORTS PRODUCT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANTA SPORTS PRODUCT 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 ANTA SPORTS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANTA SPORTS PRODUCT has no effect on the direction of WEC Energy i.e., WEC Energy and ANTA SPORTS go up and down completely randomly.

Pair Corralation between WEC Energy and ANTA SPORTS

Assuming the 90 days horizon WEC Energy Group is expected to generate 0.55 times more return on investment than ANTA SPORTS. However, WEC Energy Group is 1.8 times less risky than ANTA SPORTS. It trades about 0.06 of its potential returns per unit of risk. ANTA SPORTS PRODUCT is currently generating about 0.01 per unit of risk. If you would invest  9,102  in WEC Energy Group on October 24, 2024 and sell it today you would earn a total of  404.00  from holding WEC Energy Group or generate 4.44% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

WEC Energy Group  vs.  ANTA SPORTS PRODUCT

 Performance 
       Timeline  
WEC Energy Group 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in WEC Energy Group are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, WEC Energy is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.
ANTA SPORTS PRODUCT 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days ANTA SPORTS PRODUCT has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, ANTA SPORTS is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

WEC Energy and ANTA SPORTS Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with WEC Energy and ANTA SPORTS

The main advantage of trading using opposite WEC Energy and ANTA SPORTS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WEC Energy position performs unexpectedly, ANTA SPORTS 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 ANTA SPORTS will offset losses from the drop in ANTA SPORTS's long position.
The idea behind WEC Energy Group and ANTA SPORTS PRODUCT pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.

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