Correlation Between Alliant Energy and GE Vernova
Can any of the company-specific risk be diversified away by investing in both Alliant Energy and GE Vernova 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 GE Vernova 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 GE Vernova LLC, you can compare the effects of market volatilities on Alliant Energy and GE Vernova 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 GE Vernova. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alliant Energy and GE Vernova.
Diversification Opportunities for Alliant Energy and GE Vernova
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Alliant and GEV is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Alliant Energy Corp and GE Vernova LLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GE Vernova LLC 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 GE Vernova. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GE Vernova LLC has no effect on the direction of Alliant Energy i.e., Alliant Energy and GE Vernova go up and down completely randomly.
Pair Corralation between Alliant Energy and GE Vernova
Considering the 90-day investment horizon Alliant Energy Corp is expected to generate 0.19 times more return on investment than GE Vernova. However, Alliant Energy Corp is 5.37 times less risky than GE Vernova. It trades about 0.1 of its potential returns per unit of risk. GE Vernova LLC is currently generating about -0.04 per unit of risk. If you would invest 6,003 in Alliant Energy Corp on November 18, 2024 and sell it today you would earn a total of 130.00 from holding Alliant Energy Corp or generate 2.17% 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. GE Vernova LLC
Performance |
| Timeline |
| Alliant Energy Corp |
| GE Vernova LLC |
Alliant Energy and GE Vernova Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alliant Energy and GE Vernova
The main advantage of trading using opposite Alliant Energy and GE Vernova positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alliant Energy position performs unexpectedly, GE Vernova 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 GE Vernova will offset losses from the drop in GE Vernova's long position.| Alliant Energy vs. CMS Energy | Alliant Energy vs. Ameren Corp | Alliant Energy vs. Pinnacle West Capital | Alliant Energy vs. MGE Energy |
| GE Vernova vs. Summit Materials | GE Vernova vs. Eldorado Gold Corp | GE Vernova vs. Donegal Group B | GE Vernova vs. Sandstorm Gold Ltd |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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