Correlation Between Alstria Office and Northland Power
Can any of the company-specific risk be diversified away by investing in both Alstria Office and Northland Power 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 Alstria Office and Northland Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between alstria office REIT AG and Northland Power, you can compare the effects of market volatilities on Alstria Office and Northland Power 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 Alstria Office with a short position of Northland Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alstria Office and Northland Power.
Diversification Opportunities for Alstria Office and Northland Power
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Alstria and Northland is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding alstria office REIT AG and Northland Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northland Power and Alstria Office 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 alstria office REIT AG are associated (or correlated) with Northland Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northland Power has no effect on the direction of Alstria Office i.e., Alstria Office and Northland Power go up and down completely randomly.
Pair Corralation between Alstria Office and Northland Power
Assuming the 90 days horizon alstria office REIT AG is expected to under-perform the Northland Power. In addition to that, Alstria Office is 3.66 times more volatile than Northland Power. It trades about -0.2 of its total potential returns per unit of risk. Northland Power is currently generating about 0.08 per unit of volatility. If you would invest 1,201 in Northland Power on October 12, 2024 and sell it today you would earn a total of 29.00 from holding Northland Power or generate 2.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
alstria office REIT AG vs. Northland Power
Performance |
| Timeline |
| alstria office REIT |
| Northland Power |
Alstria Office and Northland Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alstria Office and Northland Power
The main advantage of trading using opposite Alstria Office and Northland Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alstria Office position performs unexpectedly, Northland Power 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 Northland Power will offset losses from the drop in Northland Power's long position.| Alstria Office vs. Canadian Utilities Limited | Alstria Office vs. Algonquin Power Utilities | Alstria Office vs. UNITED RENTALS | Alstria Office vs. United Breweries Co |
| Northland Power vs. WIZZ AIR HLDGUNSPADR4 | Northland Power vs. Westinghouse Air Brake | Northland Power vs. SOGECLAIR SA INH | Northland Power vs. alstria office REIT AG |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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