Correlation Between Algonquin Power and Boat Rocker
Can any of the company-specific risk be diversified away by investing in both Algonquin Power and Boat Rocker 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 Boat Rocker 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 Boat Rocker Media, you can compare the effects of market volatilities on Algonquin Power and Boat Rocker 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 Boat Rocker. Check out your portfolio center. Please also check ongoing floating volatility patterns of Algonquin Power and Boat Rocker.
Diversification Opportunities for Algonquin Power and Boat Rocker
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Algonquin and Boat is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Algonquin Power Utilities and Boat Rocker Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boat Rocker Media 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 Boat Rocker. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boat Rocker Media has no effect on the direction of Algonquin Power i.e., Algonquin Power and Boat Rocker go up and down completely randomly.
Pair Corralation between Algonquin Power and Boat Rocker
Assuming the 90 days trading horizon Algonquin Power Utilities is expected to generate 0.24 times more return on investment than Boat Rocker. However, Algonquin Power Utilities is 4.22 times less risky than Boat Rocker. It trades about 0.07 of its potential returns per unit of risk. Boat Rocker Media is currently generating about -0.05 per unit of risk. If you would invest 1,759 in Algonquin Power Utilities on August 24, 2024 and sell it today you would earn a total of 571.00 from holding Algonquin Power Utilities or generate 32.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Algonquin Power Utilities vs. Boat Rocker Media
Performance |
| Timeline |
| Algonquin Power Utilities |
| Boat Rocker Media |
Algonquin Power and Boat Rocker Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Algonquin Power and Boat Rocker
The main advantage of trading using opposite Algonquin Power and Boat Rocker positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Algonquin Power position performs unexpectedly, Boat Rocker 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 Boat Rocker will offset losses from the drop in Boat Rocker's long position.| Algonquin Power vs. Intermap Technologies Corp | Algonquin Power vs. Entree Resources | Algonquin Power vs. Forstrong Global Income | Algonquin Power vs. Terreno Resources Corp |
| Boat Rocker vs. Alphabet Inc CDR | Boat Rocker vs. Microsoft Corp CDR | Boat Rocker vs. NVIDIA CDR | Boat Rocker vs. BOEING CDR |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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