Correlation Between WEC Energy and CENTRAL PUERTO
Can any of the company-specific risk be diversified away by investing in both WEC Energy and CENTRAL PUERTO 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 CENTRAL PUERTO 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 CENTRAL PUERTO ADR1, you can compare the effects of market volatilities on WEC Energy and CENTRAL PUERTO 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 CENTRAL PUERTO. Check out your portfolio center. Please also check ongoing floating volatility patterns of WEC Energy and CENTRAL PUERTO.
Diversification Opportunities for WEC Energy and CENTRAL PUERTO
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between WEC and CENTRAL is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding WEC Energy Group and CENTRAL PUERTO ADR1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CENTRAL PUERTO ADR1 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 CENTRAL PUERTO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CENTRAL PUERTO ADR1 has no effect on the direction of WEC Energy i.e., WEC Energy and CENTRAL PUERTO go up and down completely randomly.
Pair Corralation between WEC Energy and CENTRAL PUERTO
Assuming the 90 days horizon WEC Energy Group is expected to generate 0.45 times more return on investment than CENTRAL PUERTO. However, WEC Energy Group is 2.23 times less risky than CENTRAL PUERTO. It trades about 0.02 of its potential returns per unit of risk. CENTRAL PUERTO ADR1 is currently generating about -0.08 per unit of risk. If you would invest 9,876 in WEC Energy Group on December 24, 2024 and sell it today you would earn a total of 28.00 from holding WEC Energy Group or generate 0.28% 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. CENTRAL PUERTO ADR1
Performance |
| Timeline |
| WEC Energy Group |
| CENTRAL PUERTO ADR1 |
WEC Energy and CENTRAL PUERTO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WEC Energy and CENTRAL PUERTO
The main advantage of trading using opposite WEC Energy and CENTRAL PUERTO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WEC Energy position performs unexpectedly, CENTRAL PUERTO 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 CENTRAL PUERTO will offset losses from the drop in CENTRAL PUERTO's long position.| WEC Energy vs. United Internet AG | WEC Energy vs. Addtech AB | WEC Energy vs. FORTRESS BIOTECHPRFA 25 | WEC Energy vs. Genscript Biotech |
| CENTRAL PUERTO vs. GRIFFIN MINING LTD | CENTRAL PUERTO vs. FIREWEED METALS P | CENTRAL PUERTO vs. GOLDQUEST MINING | CENTRAL PUERTO vs. Perseus Mining Limited |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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