Correlation Between Alliant Energy and Hasbro

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Can any of the company-specific risk be diversified away by investing in both Alliant Energy and Hasbro 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 Hasbro 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 Hasbro Inc, you can compare the effects of market volatilities on Alliant Energy and Hasbro 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 Hasbro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alliant Energy and Hasbro.

Diversification Opportunities for Alliant Energy and Hasbro

-0.07
  Correlation Coefficient

Good diversification

The 3 months correlation between Alliant and Hasbro is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Alliant Energy Corp and Hasbro Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hasbro Inc 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 Hasbro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hasbro Inc has no effect on the direction of Alliant Energy i.e., Alliant Energy and Hasbro go up and down completely randomly.

Pair Corralation between Alliant Energy and Hasbro

Considering the 90-day investment horizon Alliant Energy Corp is expected to generate 1.12 times more return on investment than Hasbro. However, Alliant Energy is 1.12 times more volatile than Hasbro Inc. It trades about 0.13 of its potential returns per unit of risk. Hasbro Inc is currently generating about -0.02 per unit of risk. If you would invest  6,064  in Alliant Energy Corp on August 28, 2024 and sell it today you would earn a total of  299.00  from holding Alliant Energy Corp or generate 4.93% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Alliant Energy Corp  vs.  Hasbro Inc

 Performance 
       Timeline  
Alliant Energy Corp 

Risk-Adjusted Performance

10 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Alliant Energy Corp are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Alliant Energy may actually be approaching a critical reversion point that can send shares even higher in December 2024.
Hasbro Inc 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Hasbro Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Hasbro is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Alliant Energy and Hasbro Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Alliant Energy and Hasbro

The main advantage of trading using opposite Alliant Energy and Hasbro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alliant Energy position performs unexpectedly, Hasbro 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 Hasbro will offset losses from the drop in Hasbro's long position.
The idea behind Alliant Energy Corp and Hasbro Inc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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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