Correlation Between Aldel Financial and Alliant Energy
Can any of the company-specific risk be diversified away by investing in both Aldel Financial and Alliant 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 Aldel Financial and Alliant Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aldel Financial II and Alliant Energy Corp, you can compare the effects of market volatilities on Aldel Financial and Alliant 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 Aldel Financial with a short position of Alliant Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aldel Financial and Alliant Energy.
Diversification Opportunities for Aldel Financial and Alliant Energy
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Aldel and Alliant is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Aldel Financial II and Alliant Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alliant Energy Corp and Aldel Financial 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 Aldel Financial II are associated (or correlated) with Alliant Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alliant Energy Corp has no effect on the direction of Aldel Financial i.e., Aldel Financial and Alliant Energy go up and down completely randomly.
Pair Corralation between Aldel Financial and Alliant Energy
Assuming the 90 days horizon Aldel Financial is expected to generate 498.0 times less return on investment than Alliant Energy. But when comparing it to its historical volatility, Aldel Financial II is 10.9 times less risky than Alliant Energy. It trades about 0.0 of its potential returns per unit of risk. Alliant Energy Corp is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 5,154 in Alliant Energy Corp on August 30, 2024 and sell it today you would earn a total of 1,205 from holding Alliant Energy Corp or generate 23.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 5.45% |
| Values | Daily Returns |
Aldel Financial II vs. Alliant Energy Corp
Performance |
| Timeline |
| Aldel Financial II |
| Alliant Energy Corp |
Aldel Financial and Alliant Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aldel Financial and Alliant Energy
The main advantage of trading using opposite Aldel Financial and Alliant Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aldel Financial position performs unexpectedly, Alliant 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 Alliant Energy will offset losses from the drop in Alliant Energy's long position.| Aldel Financial vs. Distoken Acquisition | Aldel Financial vs. Voyager Acquisition Corp | Aldel Financial vs. dMY Squared Technology | Aldel Financial vs. YHN Acquisition I |
| Alliant Energy vs. DTE Energy | Alliant Energy vs. Ameren Corp | Alliant Energy vs. CenterPoint Energy | Alliant Energy vs. Pinnacle West Capital |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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