Correlation Between WEC Energy and SENERELECSPGDR REGS
Can any of the company-specific risk be diversified away by investing in both WEC Energy and SENERELECSPGDR REGS 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 SENERELECSPGDR REGS 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 SENERELECSPGDR REGS 1, you can compare the effects of market volatilities on WEC Energy and SENERELECSPGDR REGS 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 SENERELECSPGDR REGS. Check out your portfolio center. Please also check ongoing floating volatility patterns of WEC Energy and SENERELECSPGDR REGS.
Diversification Opportunities for WEC Energy and SENERELECSPGDR REGS
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between WEC and SENERELECSPGDR is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding WEC Energy Group and SENERELECSPGDR REGS 1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SENERELECSPGDR REGS 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 SENERELECSPGDR REGS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SENERELECSPGDR REGS has no effect on the direction of WEC Energy i.e., WEC Energy and SENERELECSPGDR REGS go up and down completely randomly.
Pair Corralation between WEC Energy and SENERELECSPGDR REGS
Assuming the 90 days horizon WEC Energy Group is expected to generate 0.92 times more return on investment than SENERELECSPGDR REGS. However, WEC Energy Group is 1.09 times less risky than SENERELECSPGDR REGS. It trades about 0.05 of its potential returns per unit of risk. SENERELECSPGDR REGS 1 is currently generating about 0.01 per unit of risk. If you would invest 9,240 in WEC Energy Group on November 2, 2024 and sell it today you would earn a total of 142.00 from holding WEC Energy Group or generate 1.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
WEC Energy Group vs. SENERELECSPGDR REGS 1
Performance |
| Timeline |
| WEC Energy Group |
| SENERELECSPGDR REGS |
WEC Energy and SENERELECSPGDR REGS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WEC Energy and SENERELECSPGDR REGS
The main advantage of trading using opposite WEC Energy and SENERELECSPGDR REGS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WEC Energy position performs unexpectedly, SENERELECSPGDR REGS 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 SENERELECSPGDR REGS will offset losses from the drop in SENERELECSPGDR REGS's long position.| WEC Energy vs. Duke Energy | WEC Energy vs. ENDESA ADR 12 | WEC Energy vs. CK Infrastructure Holdings | WEC Energy vs. Enel Chile SA |
| SENERELECSPGDR REGS vs. Duke Energy | SENERELECSPGDR REGS vs. WEC Energy Group | SENERELECSPGDR REGS vs. ENDESA ADR 12 | SENERELECSPGDR REGS vs. CK Infrastructure 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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