Correlation Between National Vision and Alliant Energy
Can any of the company-specific risk be diversified away by investing in both National Vision 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 National Vision and Alliant Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National Vision Holdings and Alliant Energy Corp, you can compare the effects of market volatilities on National Vision 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 National Vision with a short position of Alliant Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Vision and Alliant Energy.
Diversification Opportunities for National Vision and Alliant Energy
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between National and Alliant is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding National Vision Holdings 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 National Vision 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 National Vision Holdings 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 National Vision i.e., National Vision and Alliant Energy go up and down completely randomly.
Pair Corralation between National Vision and Alliant Energy
Considering the 90-day investment horizon National Vision Holdings is expected to under-perform the Alliant Energy. In addition to that, National Vision is 2.99 times more volatile than Alliant Energy Corp. It trades about -0.04 of its total potential returns per unit of risk. Alliant Energy Corp is currently generating about 0.17 per unit of volatility. If you would invest 5,025 in Alliant Energy Corp on September 1, 2024 and sell it today you would earn a total of 1,295 from holding Alliant Energy Corp or generate 25.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Vision Holdings vs. Alliant Energy Corp
Performance |
| Timeline |
| National Vision Holdings |
| Alliant Energy Corp |
National Vision and Alliant Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Vision and Alliant Energy
The main advantage of trading using opposite National Vision and Alliant Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Vision 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.| National Vision vs. Alcon AG | National Vision vs. The Cooper Companies, | National Vision vs. AngioDynamics | National Vision vs. AptarGroup |
| 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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