Correlation Between Alliant Energy and Fluence Energy
Can any of the company-specific risk be diversified away by investing in both Alliant Energy and Fluence 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 Alliant Energy and Fluence Energy 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 Fluence Energy, you can compare the effects of market volatilities on Alliant Energy and Fluence 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 Alliant Energy with a short position of Fluence Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alliant Energy and Fluence Energy.
Diversification Opportunities for Alliant Energy and Fluence Energy
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Alliant and Fluence is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Alliant Energy Corp and Fluence Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fluence Energy 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 Fluence Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fluence Energy has no effect on the direction of Alliant Energy i.e., Alliant Energy and Fluence Energy go up and down completely randomly.
Pair Corralation between Alliant Energy and Fluence Energy
Considering the 90-day investment horizon Alliant Energy is expected to generate 3.64 times less return on investment than Fluence Energy. But when comparing it to its historical volatility, Alliant Energy Corp is 4.01 times less risky than Fluence Energy. It trades about 0.04 of its potential returns per unit of risk. Fluence Energy is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,609 in Fluence Energy on August 26, 2024 and sell it today you would earn a total of 693.00 from holding Fluence Energy or generate 43.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alliant Energy Corp vs. Fluence Energy
Performance |
| Timeline |
| Alliant Energy Corp |
| Fluence Energy |
Alliant Energy and Fluence Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alliant Energy and Fluence Energy
The main advantage of trading using opposite Alliant Energy and Fluence Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alliant Energy position performs unexpectedly, Fluence 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 Fluence Energy will offset losses from the drop in Fluence Energy's long position.| Alliant Energy vs. DTE Energy | Alliant Energy vs. Ameren Corp | Alliant Energy vs. CenterPoint Energy | Alliant Energy vs. Pinnacle West Capital |
| Fluence Energy vs. Altus Power | Fluence Energy vs. Ormat Technologies | Fluence Energy vs. Enlight Renewable Energy | Fluence Energy vs. Advent Technologies Holdings |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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