Correlation Between Alliant Energy and Enel Chile
Can any of the company-specific risk be diversified away by investing in both Alliant Energy and Enel Chile 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 Enel Chile 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 Enel Chile SA, you can compare the effects of market volatilities on Alliant Energy and Enel Chile 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 Enel Chile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alliant Energy and Enel Chile.
Diversification Opportunities for Alliant Energy and Enel Chile
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Alliant and Enel is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Alliant Energy Corp and Enel Chile SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enel Chile SA 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 Enel Chile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enel Chile SA has no effect on the direction of Alliant Energy i.e., Alliant Energy and Enel Chile go up and down completely randomly.
Pair Corralation between Alliant Energy and Enel Chile
Considering the 90-day investment horizon Alliant Energy Corp is expected to generate 1.06 times more return on investment than Enel Chile. However, Alliant Energy is 1.06 times more volatile than Enel Chile SA. It trades about 0.23 of its potential returns per unit of risk. Enel Chile SA is currently generating about -0.03 per unit of risk. If you would invest 5,880 in Alliant Energy Corp on August 31, 2024 and sell it today you would earn a total of 479.00 from holding Alliant Energy Corp or generate 8.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alliant Energy Corp vs. Enel Chile SA
Performance |
| Timeline |
| Alliant Energy Corp |
| Enel Chile SA |
Alliant Energy and Enel Chile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alliant Energy and Enel Chile
The main advantage of trading using opposite Alliant Energy and Enel Chile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alliant Energy position performs unexpectedly, Enel Chile 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 Enel Chile will offset losses from the drop in Enel Chile's long position.| Alliant Energy vs. DTE Energy | Alliant Energy vs. CenterPoint Energy | Alliant Energy vs. Pinnacle West Capital | Alliant Energy vs. CMS Energy |
| Enel Chile vs. DTE Energy | Enel Chile vs. CenterPoint Energy | Enel Chile vs. Pinnacle West Capital | Enel Chile vs. CMS 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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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