Correlation Between Alliant Energy and Proficient Auto

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

Diversification Opportunities for Alliant Energy and Proficient Auto

-0.07

Correlation Coefficient

Alliant Energy  Proficient Auto

Good diversification

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

Pair Corralation between Alliant Energy and Proficient Auto

Considering the 90-day investment horizon Alliant Energy Corp is expected to generate 0.26 times more return on investment than Proficient Auto. However, Alliant Energy Corp is 3.79 times less risky than Proficient Auto. It trades about 0.01 of its potential returns per unit of risk. Proficient Auto Logistics, is currently generating about -0.2 per unit of risk. If you would invest  5,946  in Alliant Energy Corp on September 25, 2024 and sell it today you would earn a total of  16.00  from holding Alliant Energy Corp or generate 0.27% 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.  Proficient Auto Logistics,

Alliant Energy Corp

Risk-Adjusted Performance

0 of 100

Very Weak

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

Proficient Auto Logi

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Proficient Auto Logistics, has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Alliant Energy and Proficient Auto

The main advantage of trading using opposite Alliant Energy and Proficient Auto positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alliant Energy position performs unexpectedly, Proficient Auto 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 Proficient Auto will offset losses from the drop in Proficient Auto's long position.

The idea behind Alliant Energy Corp and Proficient Auto Logistics, 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.