Correlation Between Algonquin Power and SOGECLAIR
Can any of the company-specific risk be diversified away by investing in both Algonquin Power and SOGECLAIR 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 SOGECLAIR 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 SOGECLAIR SA INH, you can compare the effects of market volatilities on Algonquin Power and SOGECLAIR 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 SOGECLAIR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Algonquin Power and SOGECLAIR.
Diversification Opportunities for Algonquin Power and SOGECLAIR
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Algonquin and SOGECLAIR is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Algonquin Power Utilities and SOGECLAIR SA INH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SOGECLAIR SA INH 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 SOGECLAIR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SOGECLAIR SA INH has no effect on the direction of Algonquin Power i.e., Algonquin Power and SOGECLAIR go up and down completely randomly.
Pair Corralation between Algonquin Power and SOGECLAIR
Assuming the 90 days horizon Algonquin Power Utilities is expected to generate 0.73 times more return on investment than SOGECLAIR. However, Algonquin Power Utilities is 1.36 times less risky than SOGECLAIR. It trades about -0.08 of its potential returns per unit of risk. SOGECLAIR SA INH is currently generating about -0.06 per unit of risk. If you would invest 513.00 in Algonquin Power Utilities on November 3, 2024 and sell it today you would lose (103.00) from holding Algonquin Power Utilities or give up 20.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Algonquin Power Utilities vs. SOGECLAIR SA INH
Performance |
| Timeline |
| Algonquin Power Utilities |
| SOGECLAIR SA INH |
Algonquin Power and SOGECLAIR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Algonquin Power and SOGECLAIR
The main advantage of trading using opposite Algonquin Power and SOGECLAIR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Algonquin Power position performs unexpectedly, SOGECLAIR 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 SOGECLAIR will offset losses from the drop in SOGECLAIR's long position.| Algonquin Power vs. INVITATION HOMES DL | Algonquin Power vs. MAVEN WIRELESS SWEDEN | Algonquin Power vs. Corporate Office Properties | Algonquin Power vs. OFFICE DEPOT |
| SOGECLAIR vs. CANON MARKETING JP | SOGECLAIR vs. CARSALESCOM | SOGECLAIR vs. Firan Technology Group | SOGECLAIR vs. Canon Marketing Japan |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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