Correlation Between Algonquin Power and Calibre Mining
Can any of the company-specific risk be diversified away by investing in both Algonquin Power and Calibre Mining 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 Calibre Mining 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 Calibre Mining Corp, you can compare the effects of market volatilities on Algonquin Power and Calibre Mining 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 Calibre Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Algonquin Power and Calibre Mining.
Diversification Opportunities for Algonquin Power and Calibre Mining
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Algonquin and Calibre is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Algonquin Power Utilities and Calibre Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calibre Mining Corp 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 Calibre Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calibre Mining Corp has no effect on the direction of Algonquin Power i.e., Algonquin Power and Calibre Mining go up and down completely randomly.
Pair Corralation between Algonquin Power and Calibre Mining
Assuming the 90 days horizon Algonquin Power Utilities is expected to under-perform the Calibre Mining. But the stock apears to be less risky and, when comparing its historical volatility, Algonquin Power Utilities is 1.56 times less risky than Calibre Mining. The stock trades about -0.02 of its potential returns per unit of risk. The Calibre Mining Corp is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 61.00 in Calibre Mining Corp on August 24, 2024 and sell it today you would earn a total of 99.00 from holding Calibre Mining Corp or generate 162.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Algonquin Power Utilities vs. Calibre Mining Corp
Performance |
| Timeline |
| Algonquin Power Utilities |
| Calibre Mining Corp |
Algonquin Power and Calibre Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Algonquin Power and Calibre Mining
The main advantage of trading using opposite Algonquin Power and Calibre Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Algonquin Power position performs unexpectedly, Calibre Mining 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 Calibre Mining will offset losses from the drop in Calibre Mining's long position.| Algonquin Power vs. Superior Plus Corp | Algonquin Power vs. NMI Holdings | Algonquin Power vs. Origin Agritech | Algonquin Power vs. SIVERS SEMICONDUCTORS AB |
| Calibre Mining vs. Apple Inc | Calibre Mining vs. Apple Inc | Calibre Mining vs. Apple Inc | Calibre Mining 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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