Correlation Between Algonquin Power and Neinor Homes
Can any of the company-specific risk be diversified away by investing in both Algonquin Power and Neinor Homes 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 Algonquin Power and Neinor Homes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Algonquin Power Utilities and Neinor Homes SA, you can compare the effects of market volatilities on Algonquin Power and Neinor Homes 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 Algonquin Power with a short position of Neinor Homes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Algonquin Power and Neinor Homes.
Diversification Opportunities for Algonquin Power and Neinor Homes
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Algonquin and Neinor is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Algonquin Power Utilities and Neinor Homes SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neinor Homes SA and Algonquin Power 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 Algonquin Power Utilities are associated (or correlated) with Neinor Homes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neinor Homes SA has no effect on the direction of Algonquin Power i.e., Algonquin Power and Neinor Homes go up and down completely randomly.
Pair Corralation between Algonquin Power and Neinor Homes
Assuming the 90 days horizon Algonquin Power Utilities is expected to under-perform the Neinor Homes. In addition to that, Algonquin Power is 1.07 times more volatile than Neinor Homes SA. It trades about -0.03 of its total potential returns per unit of risk. Neinor Homes SA is currently generating about 0.15 per unit of volatility. If you would invest 888.00 in Neinor Homes SA on November 5, 2024 and sell it today you would earn a total of 758.00 from holding Neinor Homes SA or generate 85.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Algonquin Power Utilities vs. Neinor Homes SA
Performance |
| Timeline |
| Algonquin Power Utilities |
| Neinor Homes SA |
Algonquin Power and Neinor Homes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Algonquin Power and Neinor Homes
The main advantage of trading using opposite Algonquin Power and Neinor Homes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Algonquin Power position performs unexpectedly, Neinor Homes 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 Neinor Homes will offset losses from the drop in Neinor Homes' long position.| Algonquin Power vs. GRIFFIN MINING LTD | Algonquin Power vs. NXP Semiconductors NV | Algonquin Power vs. De Grey Mining | Algonquin Power vs. MAG SILVER |
| Neinor Homes vs. DALATA HOTEL | Neinor Homes vs. InterContinental Hotels Group | Neinor Homes vs. NH HOTEL GROUP | Neinor Homes vs. CSSC Offshore Marine |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
Other Complementary Tools
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |