Correlation Between Algonquin Power and Apple
Can any of the company-specific risk be diversified away by investing in both Algonquin Power and Apple 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 Apple 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 Apple Inc, you can compare the effects of market volatilities on Algonquin Power and Apple 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 Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of Algonquin Power and Apple.
Diversification Opportunities for Algonquin Power and Apple
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Algonquin and Apple is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Algonquin Power Utilities and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc 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 Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc has no effect on the direction of Algonquin Power i.e., Algonquin Power and Apple go up and down completely randomly.
Pair Corralation between Algonquin Power and Apple
Assuming the 90 days horizon Algonquin Power Utilities is expected to under-perform the Apple. In addition to that, Algonquin Power is 1.94 times more volatile than Apple Inc. It trades about -0.28 of its total potential returns per unit of risk. Apple Inc is currently generating about 0.66 per unit of volatility. If you would invest 21,890 in Apple Inc on September 24, 2024 and sell it today you would earn a total of 2,460 from holding Apple Inc or generate 11.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Algonquin Power Utilities vs. Apple Inc
Performance |
| Timeline |
| Algonquin Power Utilities |
| Apple Inc |
Algonquin Power and Apple Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Algonquin Power and Apple
The main advantage of trading using opposite Algonquin Power and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Algonquin Power position performs unexpectedly, Apple 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 Apple will offset losses from the drop in Apple's long position.| Algonquin Power vs. Orsted AS | Algonquin Power vs. EDP Renovveis SA | Algonquin Power vs. CGN Power Co | Algonquin Power vs. Huaneng Power International |
| Apple vs. COLUMBIA SPORTSWEAR | Apple vs. Algonquin Power Utilities | Apple vs. American Eagle Outfitters | Apple vs. AUST AGRICULTURAL |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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