Correlation Between KAUFMAN ET and Algonquin Power
Can any of the company-specific risk be diversified away by investing in both KAUFMAN ET and Algonquin Power 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 KAUFMAN ET and Algonquin Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KAUFMAN ET BROAD and Algonquin Power Utilities, you can compare the effects of market volatilities on KAUFMAN ET and Algonquin Power 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 KAUFMAN ET with a short position of Algonquin Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of KAUFMAN ET and Algonquin Power.
Diversification Opportunities for KAUFMAN ET and Algonquin Power
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between KAUFMAN and Algonquin is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding KAUFMAN ET BROAD and Algonquin Power Utilities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Algonquin Power Utilities and KAUFMAN ET 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 KAUFMAN ET BROAD are associated (or correlated) with Algonquin Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Algonquin Power Utilities has no effect on the direction of KAUFMAN ET i.e., KAUFMAN ET and Algonquin Power go up and down completely randomly.
Pair Corralation between KAUFMAN ET and Algonquin Power
Assuming the 90 days trading horizon KAUFMAN ET BROAD is expected to generate 0.98 times more return on investment than Algonquin Power. However, KAUFMAN ET BROAD is 1.02 times less risky than Algonquin Power. It trades about -0.01 of its potential returns per unit of risk. Algonquin Power Utilities is currently generating about -0.06 per unit of risk. If you would invest 3,295 in KAUFMAN ET BROAD on September 1, 2024 and sell it today you would lose (195.00) from holding KAUFMAN ET BROAD or give up 5.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KAUFMAN ET BROAD vs. Algonquin Power Utilities
Performance |
| Timeline |
| KAUFMAN ET BROAD |
| Algonquin Power Utilities |
KAUFMAN ET and Algonquin Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KAUFMAN ET and Algonquin Power
The main advantage of trading using opposite KAUFMAN ET and Algonquin Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KAUFMAN ET position performs unexpectedly, Algonquin Power 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 Algonquin Power will offset losses from the drop in Algonquin Power's long position.| KAUFMAN ET vs. SIVERS SEMICONDUCTORS AB | KAUFMAN ET vs. Darden Restaurants | KAUFMAN ET vs. Reliance Steel Aluminum | KAUFMAN ET vs. Q2M Managementberatung AG |
| Algonquin Power vs. Entravision Communications | Algonquin Power vs. CeoTronics AG | Algonquin Power vs. Ribbon Communications | Algonquin Power vs. INTERSHOP Communications Aktiengesellschaft |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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