Correlation Between Algonquin Power and ScanSource
Can any of the company-specific risk be diversified away by investing in both Algonquin Power and ScanSource 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 ScanSource 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 ScanSource, you can compare the effects of market volatilities on Algonquin Power and ScanSource 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 ScanSource. Check out your portfolio center. Please also check ongoing floating volatility patterns of Algonquin Power and ScanSource.
Diversification Opportunities for Algonquin Power and ScanSource
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Algonquin and ScanSource is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Algonquin Power Utilities and ScanSource in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ScanSource 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 ScanSource. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ScanSource has no effect on the direction of Algonquin Power i.e., Algonquin Power and ScanSource go up and down completely randomly.
Pair Corralation between Algonquin Power and ScanSource
Assuming the 90 days horizon Algonquin Power Utilities is expected to under-perform the ScanSource. But the stock apears to be less risky and, when comparing its historical volatility, Algonquin Power Utilities is 1.08 times less risky than ScanSource. The stock trades about -0.02 of its potential returns per unit of risk. The ScanSource is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2,920 in ScanSource on August 28, 2024 and sell it today you would earn a total of 1,760 from holding ScanSource or generate 60.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Algonquin Power Utilities vs. ScanSource
Performance |
| Timeline |
| Algonquin Power Utilities |
| ScanSource |
Algonquin Power and ScanSource Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Algonquin Power and ScanSource
The main advantage of trading using opposite Algonquin Power and ScanSource positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Algonquin Power position performs unexpectedly, ScanSource 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 ScanSource will offset losses from the drop in ScanSource's long position.| Algonquin Power vs. Bausch Health Companies | Algonquin Power vs. YOOMA WELLNESS INC | Algonquin Power vs. Boyd Gaming | Algonquin Power vs. NORDHEALTH AS NK |
| ScanSource vs. Cars Inc | ScanSource vs. Goodyear Tire Rubber | ScanSource vs. SANOK RUBBER ZY | ScanSource vs. Eagle Materials |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges |