Correlation Between Alternus Energy and Kansai Electric
Can any of the company-specific risk be diversified away by investing in both Alternus Energy and Kansai Electric 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 Alternus Energy and Kansai Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alternus Energy Group and The Kansai Electric, you can compare the effects of market volatilities on Alternus Energy and Kansai Electric 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 Alternus Energy with a short position of Kansai Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alternus Energy and Kansai Electric.
Diversification Opportunities for Alternus Energy and Kansai Electric
-1.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Alternus and Kansai is -1.0. Overlapping area represents the amount of risk that can be diversified away by holding Alternus Energy Group and The Kansai Electric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kansai Electric and Alternus 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 Alternus Energy Group are associated (or correlated) with Kansai Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kansai Electric has no effect on the direction of Alternus Energy i.e., Alternus Energy and Kansai Electric go up and down completely randomly.
Pair Corralation between Alternus Energy and Kansai Electric
Assuming the 90 days horizon Alternus Energy Group is expected to generate 21.65 times more return on investment than Kansai Electric. However, Alternus Energy is 21.65 times more volatile than The Kansai Electric. It trades about 0.04 of its potential returns per unit of risk. The Kansai Electric is currently generating about 0.11 per unit of risk. If you would invest 125.00 in Alternus Energy Group on October 24, 2024 and sell it today you would lose (73.00) from holding Alternus Energy Group or give up 58.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Strong |
| Accuracy | 50.31% |
| Values | Daily Returns |
Alternus Energy Group vs. The Kansai Electric
Performance |
| Timeline |
| Alternus Energy Group |
| Kansai Electric |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Alternus Energy and Kansai Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alternus Energy and Kansai Electric
The main advantage of trading using opposite Alternus Energy and Kansai Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alternus Energy position performs unexpectedly, Kansai Electric 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 Kansai Electric will offset losses from the drop in Kansai Electric's long position.| Alternus Energy vs. Denison Mines Corp | Alternus Energy vs. Coty Inc | Alternus Energy vs. Inflection Point Acquisition | Alternus Energy vs. Lion One Metals |
| Kansai Electric vs. BCE Inc | Kansai Electric vs. Pinterest | Kansai Electric vs. Tesla Inc | Kansai Electric vs. Modine Manufacturing |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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