Correlation Between GE Vernova and Alliant Energy
Can any of the company-specific risk be diversified away by investing in both GE Vernova 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 GE Vernova and Alliant Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GE Vernova LLC and Alliant Energy Corp, you can compare the effects of market volatilities on GE Vernova 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 GE Vernova with a short position of Alliant Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of GE Vernova and Alliant Energy.
Diversification Opportunities for GE Vernova and Alliant Energy
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GEV and Alliant is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding GE Vernova LLC 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 GE Vernova 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 GE Vernova LLC 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 GE Vernova i.e., GE Vernova and Alliant Energy go up and down completely randomly.
Pair Corralation between GE Vernova and Alliant Energy
Considering the 90-day investment horizon GE Vernova LLC is expected to generate 1.81 times more return on investment than Alliant Energy. However, GE Vernova is 1.81 times more volatile than Alliant Energy Corp. It trades about 0.3 of its potential returns per unit of risk. Alliant Energy Corp is currently generating about 0.11 per unit of risk. If you would invest 27,642 in GE Vernova LLC on August 23, 2024 and sell it today you would earn a total of 6,343 from holding GE Vernova LLC or generate 22.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GE Vernova LLC vs. Alliant Energy Corp
Performance |
| Timeline |
| GE Vernova LLC |
| Alliant Energy Corp |
GE Vernova and Alliant Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GE Vernova and Alliant Energy
The main advantage of trading using opposite GE Vernova and Alliant Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GE Vernova 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.| GE Vernova vs. Sun Country Airlines | GE Vernova vs. Where Food Comes | GE Vernova vs. Ihuman Inc | GE Vernova vs. AMCON Distributing |
| 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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