Correlation Between Algonquin Power and QUICKSTEP HLDGS
Can any of the company-specific risk be diversified away by investing in both Algonquin Power and QUICKSTEP HLDGS 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 QUICKSTEP HLDGS 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 QUICKSTEP HLDGS, you can compare the effects of market volatilities on Algonquin Power and QUICKSTEP HLDGS 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 QUICKSTEP HLDGS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Algonquin Power and QUICKSTEP HLDGS.
Diversification Opportunities for Algonquin Power and QUICKSTEP HLDGS
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Algonquin and QUICKSTEP is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Algonquin Power Utilities and QUICKSTEP HLDGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on QUICKSTEP HLDGS 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 QUICKSTEP HLDGS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of QUICKSTEP HLDGS has no effect on the direction of Algonquin Power i.e., Algonquin Power and QUICKSTEP HLDGS go up and down completely randomly.
Pair Corralation between Algonquin Power and QUICKSTEP HLDGS
Assuming the 90 days horizon Algonquin Power Utilities is expected to under-perform the QUICKSTEP HLDGS. But the stock apears to be less risky and, when comparing its historical volatility, Algonquin Power Utilities is 3.73 times less risky than QUICKSTEP HLDGS. The stock trades about -0.01 of its potential returns per unit of risk. The QUICKSTEP HLDGS is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 28.00 in QUICKSTEP HLDGS on September 12, 2024 and sell it today you would lose (6.00) from holding QUICKSTEP HLDGS or give up 21.43% 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. QUICKSTEP HLDGS
Performance |
| Timeline |
| Algonquin Power Utilities |
| QUICKSTEP HLDGS |
Algonquin Power and QUICKSTEP HLDGS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Algonquin Power and QUICKSTEP HLDGS
The main advantage of trading using opposite Algonquin Power and QUICKSTEP HLDGS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Algonquin Power position performs unexpectedly, QUICKSTEP HLDGS 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 QUICKSTEP HLDGS will offset losses from the drop in QUICKSTEP HLDGS's long position.| Algonquin Power vs. Superior Plus Corp | Algonquin Power vs. SIVERS SEMICONDUCTORS AB | Algonquin Power vs. Norsk Hydro ASA | Algonquin Power vs. Reliance Steel Aluminum |
| QUICKSTEP HLDGS vs. Apple Inc | QUICKSTEP HLDGS vs. Apple Inc | QUICKSTEP HLDGS vs. Apple Inc | QUICKSTEP HLDGS vs. Apple Inc |
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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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