Correlation Between Algonquin Power and Identiv
Can any of the company-specific risk be diversified away by investing in both Algonquin Power and Identiv 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 Identiv 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 Identiv, you can compare the effects of market volatilities on Algonquin Power and Identiv 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 Identiv. Check out your portfolio center. Please also check ongoing floating volatility patterns of Algonquin Power and Identiv.
Diversification Opportunities for Algonquin Power and Identiv
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Algonquin and Identiv is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Algonquin Power Utilities and Identiv in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Identiv 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 Identiv. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Identiv has no effect on the direction of Algonquin Power i.e., Algonquin Power and Identiv go up and down completely randomly.
Pair Corralation between Algonquin Power and Identiv
Assuming the 90 days horizon Algonquin Power Utilities is expected to under-perform the Identiv. But the stock apears to be less risky and, when comparing its historical volatility, Algonquin Power Utilities is 2.22 times less risky than Identiv. The stock trades about -0.04 of its potential returns per unit of risk. The Identiv is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 556.00 in Identiv on October 13, 2024 and sell it today you would lose (226.00) from holding Identiv or give up 40.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.78% |
| Values | Daily Returns |
Algonquin Power Utilities vs. Identiv
Performance |
| Timeline |
| Algonquin Power Utilities |
| Identiv |
Algonquin Power and Identiv Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Algonquin Power and Identiv
The main advantage of trading using opposite Algonquin Power and Identiv positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Algonquin Power position performs unexpectedly, Identiv 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 Identiv will offset losses from the drop in Identiv's long position.| Algonquin Power vs. Align Technology | Algonquin Power vs. TYSON FOODS A | Algonquin Power vs. UPDATE SOFTWARE | Algonquin Power vs. BG Foods |
| Identiv vs. Algonquin Power Utilities | Identiv vs. COSMOSTEEL HLDGS | Identiv vs. PLAYTIKA HOLDING DL 01 | Identiv vs. PLAYTECH |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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