Correlation Between Electrovaya Common and Alliant Energy
Can any of the company-specific risk be diversified away by investing in both Electrovaya Common 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 Electrovaya Common and Alliant Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Electrovaya Common Shares and Alliant Energy Corp, you can compare the effects of market volatilities on Electrovaya Common 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 Electrovaya Common with a short position of Alliant Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electrovaya Common and Alliant Energy.
Diversification Opportunities for Electrovaya Common and Alliant Energy
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Electrovaya and Alliant is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Electrovaya Common Shares 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 Electrovaya Common 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 Electrovaya Common Shares 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 Electrovaya Common i.e., Electrovaya Common and Alliant Energy go up and down completely randomly.
Pair Corralation between Electrovaya Common and Alliant Energy
Given the investment horizon of 90 days Electrovaya Common Shares is expected to generate 2.92 times more return on investment than Alliant Energy. However, Electrovaya Common is 2.92 times more volatile than Alliant Energy Corp. It trades about 0.27 of its potential returns per unit of risk. Alliant Energy Corp is currently generating about 0.16 per unit of risk. If you would invest 206.00 in Electrovaya Common Shares on September 1, 2024 and sell it today you would earn a total of 58.00 from holding Electrovaya Common Shares or generate 28.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Electrovaya Common Shares vs. Alliant Energy Corp
Performance |
| Timeline |
| Electrovaya Common Shares |
| Alliant Energy Corp |
Electrovaya Common and Alliant Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Electrovaya Common and Alliant Energy
The main advantage of trading using opposite Electrovaya Common and Alliant Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electrovaya Common 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.| Electrovaya Common vs. Bloom Energy Corp | Electrovaya Common vs. Microvast Holdings | Electrovaya Common vs. Solid Power | Electrovaya Common vs. FREYR Battery SA |
| Alliant Energy vs. MGE Energy | Alliant Energy vs. CMS Energy | Alliant Energy vs. OGE Energy | Alliant Energy vs. DTE Energy |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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