Correlation Between Alliant Energy and Acorda Therapeutics
Can any of the company-specific risk be diversified away by investing in both Alliant Energy and Acorda Therapeutics 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 Acorda Therapeutics 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 Acorda Therapeutics, you can compare the effects of market volatilities on Alliant Energy and Acorda Therapeutics 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 Acorda Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alliant Energy and Acorda Therapeutics.
Diversification Opportunities for Alliant Energy and Acorda Therapeutics
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Alliant and Acorda is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Alliant Energy Corp and Acorda Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acorda Therapeutics 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 Acorda Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acorda Therapeutics has no effect on the direction of Alliant Energy i.e., Alliant Energy and Acorda Therapeutics go up and down completely randomly.
Pair Corralation between Alliant Energy and Acorda Therapeutics
If you would invest (100.00) in Acorda Therapeutics on March 13, 2024 and sell it today you would earn a total of 100.00 from holding Acorda Therapeutics or generate -100.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 0.0% |
Values | Daily Returns |
Alliant Energy Corp vs. Acorda Therapeutics
Performance |
Timeline |
Alliant Energy Corp |
Acorda Therapeutics |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Alliant Energy and Acorda Therapeutics Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Alliant Energy and Acorda Therapeutics
The main advantage of trading using opposite Alliant Energy and Acorda Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alliant Energy position performs unexpectedly, Acorda Therapeutics 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 Acorda Therapeutics will offset losses from the drop in Acorda Therapeutics' 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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