Correlation Between Alliant Energy and Skillful Craftsman
Can any of the company-specific risk be diversified away by investing in both Alliant Energy and Skillful Craftsman 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 Alliant Energy and Skillful Craftsman into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alliant Energy Corp and Skillful Craftsman Education, you can compare the effects of market volatilities on Alliant Energy and Skillful Craftsman 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 Alliant Energy with a short position of Skillful Craftsman. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alliant Energy and Skillful Craftsman.
Diversification Opportunities for Alliant Energy and Skillful Craftsman
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Alliant and Skillful is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Alliant Energy Corp and Skillful Craftsman Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Skillful Craftsman and Alliant 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 Alliant Energy Corp are associated (or correlated) with Skillful Craftsman. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Skillful Craftsman has no effect on the direction of Alliant Energy i.e., Alliant Energy and Skillful Craftsman go up and down completely randomly.
Pair Corralation between Alliant Energy and Skillful Craftsman
Considering the 90-day investment horizon Alliant Energy Corp is expected to generate 0.34 times more return on investment than Skillful Craftsman. However, Alliant Energy Corp is 2.93 times less risky than Skillful Craftsman. It trades about 0.12 of its potential returns per unit of risk. Skillful Craftsman Education is currently generating about -0.04 per unit of risk. If you would invest 5,756 in Alliant Energy Corp on August 23, 2024 and sell it today you would earn a total of 564.00 from holding Alliant Energy Corp or generate 9.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alliant Energy Corp vs. Skillful Craftsman Education
Performance |
| Timeline |
| Alliant Energy Corp |
| Skillful Craftsman |
Alliant Energy and Skillful Craftsman Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alliant Energy and Skillful Craftsman
The main advantage of trading using opposite Alliant Energy and Skillful Craftsman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alliant Energy position performs unexpectedly, Skillful Craftsman 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 Skillful Craftsman will offset losses from the drop in Skillful Craftsman's long position.| Alliant Energy vs. DTE Energy | Alliant Energy vs. Ameren Corp | Alliant Energy vs. CenterPoint Energy | Alliant Energy vs. Pinnacle West Capital |
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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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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