Correlation Between Algonquin Power and Information Services
Can any of the company-specific risk be diversified away by investing in both Algonquin Power and Information Services 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 Information Services 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 Information Services, you can compare the effects of market volatilities on Algonquin Power and Information Services 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 Information Services. Check out your portfolio center. Please also check ongoing floating volatility patterns of Algonquin Power and Information Services.
Diversification Opportunities for Algonquin Power and Information Services
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Algonquin and Information is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Algonquin Power Utilities and Information Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Information Services 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 Information Services. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Information Services has no effect on the direction of Algonquin Power i.e., Algonquin Power and Information Services go up and down completely randomly.
Pair Corralation between Algonquin Power and Information Services
Assuming the 90 days trading horizon Algonquin Power is expected to generate 63.69 times less return on investment than Information Services. But when comparing it to its historical volatility, Algonquin Power Utilities is 1.73 times less risky than Information Services. It trades about 0.0 of its potential returns per unit of risk. Information Services is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 2,630 in Information Services on October 25, 2024 and sell it today you would earn a total of 80.00 from holding Information Services or generate 3.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Algonquin Power Utilities vs. Information Services
Performance |
| Timeline |
| Algonquin Power Utilities |
| Information Services |
Algonquin Power and Information Services Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Algonquin Power and Information Services
The main advantage of trading using opposite Algonquin Power and Information Services positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Algonquin Power position performs unexpectedly, Information Services 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 Information Services will offset losses from the drop in Information Services' long position.| Algonquin Power vs. Excelsior Mining Corp | Algonquin Power vs. Vista Gold | Algonquin Power vs. Condor Energies | Algonquin Power vs. Silver Bear Resources |
| Information Services vs. Canadian Utilities Limited | Information Services vs. CVW CleanTech | Information Services vs. Forsys Metals Corp | Information Services vs. Nicola Mining |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
Other Complementary Tools
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Stocks Directory Find actively traded stocks across global markets |