Correlation Between Fortis and WEC Energy
Can any of the company-specific risk be diversified away by investing in both Fortis and WEC Energy 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 Fortis and WEC Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fortis Inc and WEC Energy Group, you can compare the effects of market volatilities on Fortis and WEC Energy 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 Fortis with a short position of WEC Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fortis and WEC Energy.
Diversification Opportunities for Fortis and WEC Energy
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fortis and WEC is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Fortis Inc and WEC Energy Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WEC Energy Group and Fortis 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 Fortis Inc are associated (or correlated) with WEC Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WEC Energy Group has no effect on the direction of Fortis i.e., Fortis and WEC Energy go up and down completely randomly.
Pair Corralation between Fortis and WEC Energy
Considering the 90-day investment horizon Fortis is expected to generate 1.14 times less return on investment than WEC Energy. But when comparing it to its historical volatility, Fortis Inc is 1.32 times less risky than WEC Energy. It trades about 0.09 of its potential returns per unit of risk. WEC Energy Group is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 10,630 in WEC Energy Group on August 26, 2025 and sell it today you would earn a total of 472.00 from holding WEC Energy Group or generate 4.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fortis Inc vs. WEC Energy Group
Performance |
| Timeline |
| Fortis Inc |
| WEC Energy Group |
Fortis and WEC Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fortis and WEC Energy
The main advantage of trading using opposite Fortis and WEC Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fortis position performs unexpectedly, WEC Energy 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 WEC Energy will offset losses from the drop in WEC Energy's long position.| Fortis vs. Barrick Mining | Fortis vs. AeroVironment | Fortis vs. DIRTT Environmental Solutions | Fortis vs. Robix Environmental Technologies |
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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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