Correlation Between Algonquin Power and De Grey
Can any of the company-specific risk be diversified away by investing in both Algonquin Power and De Grey 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 De Grey 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 De Grey Mining, you can compare the effects of market volatilities on Algonquin Power and De Grey 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 De Grey. Check out your portfolio center. Please also check ongoing floating volatility patterns of Algonquin Power and De Grey.
Diversification Opportunities for Algonquin Power and De Grey
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Algonquin and DGD is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Algonquin Power Utilities and De Grey Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on De Grey Mining 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 De Grey. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of De Grey Mining has no effect on the direction of Algonquin Power i.e., Algonquin Power and De Grey go up and down completely randomly.
Pair Corralation between Algonquin Power and De Grey
Assuming the 90 days horizon Algonquin Power Utilities is expected to under-perform the De Grey. But the stock apears to be less risky and, when comparing its historical volatility, Algonquin Power Utilities is 2.69 times less risky than De Grey. The stock trades about -0.03 of its potential returns per unit of risk. The De Grey Mining is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 86.00 in De Grey Mining on November 2, 2024 and sell it today you would earn a total of 28.00 from holding De Grey Mining or generate 32.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.33% |
| Values | Daily Returns |
Algonquin Power Utilities vs. De Grey Mining
Performance |
| Timeline |
| Algonquin Power Utilities |
| De Grey Mining |
Algonquin Power and De Grey Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Algonquin Power and De Grey
The main advantage of trading using opposite Algonquin Power and De Grey positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Algonquin Power position performs unexpectedly, De Grey 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 De Grey will offset losses from the drop in De Grey'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 |
| De Grey vs. DENTSPLY SIRONA | De Grey vs. Olympic Steel | De Grey vs. JAPAN AIRLINES | De Grey vs. United Airlines Holdings |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |