Correlation Between Algonquin Power and THRACE PLASTICS
Can any of the company-specific risk be diversified away by investing in both Algonquin Power and THRACE PLASTICS 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 THRACE PLASTICS 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 THRACE PLASTICS, you can compare the effects of market volatilities on Algonquin Power and THRACE PLASTICS 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 THRACE PLASTICS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Algonquin Power and THRACE PLASTICS.
Diversification Opportunities for Algonquin Power and THRACE PLASTICS
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Algonquin and THRACE is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Algonquin Power Utilities and THRACE PLASTICS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on THRACE PLASTICS 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 THRACE PLASTICS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of THRACE PLASTICS has no effect on the direction of Algonquin Power i.e., Algonquin Power and THRACE PLASTICS go up and down completely randomly.
Pair Corralation between Algonquin Power and THRACE PLASTICS
Assuming the 90 days horizon Algonquin Power Utilities is expected to under-perform the THRACE PLASTICS. In addition to that, Algonquin Power is 1.58 times more volatile than THRACE PLASTICS. It trades about -0.03 of its total potential returns per unit of risk. THRACE PLASTICS is currently generating about 0.0 per unit of volatility. If you would invest 411.00 in THRACE PLASTICS on November 7, 2024 and sell it today you would lose (4.00) from holding THRACE PLASTICS or give up 0.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Algonquin Power Utilities vs. THRACE PLASTICS
Performance |
| Timeline |
| Algonquin Power Utilities |
| THRACE PLASTICS |
Algonquin Power and THRACE PLASTICS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Algonquin Power and THRACE PLASTICS
The main advantage of trading using opposite Algonquin Power and THRACE PLASTICS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Algonquin Power position performs unexpectedly, THRACE PLASTICS 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 THRACE PLASTICS will offset losses from the drop in THRACE PLASTICS's long position.| Algonquin Power vs. PLAYTECH | Algonquin Power vs. SALESFORCE INC CDR | Algonquin Power vs. Salesforce | Algonquin Power vs. The Trade Desk |
| THRACE PLASTICS vs. Salesforce | THRACE PLASTICS vs. Tyson Foods | THRACE PLASTICS vs. Carnegie Clean Energy | THRACE PLASTICS vs. GungHo Online Entertainment |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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