Correlation Between Algonquin Power and Millbank Mining
Can any of the company-specific risk be diversified away by investing in both Algonquin Power and Millbank 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 Millbank 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 Millbank Mining Corp, you can compare the effects of market volatilities on Algonquin Power and Millbank 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 Millbank Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Algonquin Power and Millbank Mining.
Diversification Opportunities for Algonquin Power and Millbank Mining
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Algonquin and Millbank is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Algonquin Power Utilities and Millbank Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Millbank 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 Millbank Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Millbank Mining Corp has no effect on the direction of Algonquin Power i.e., Algonquin Power and Millbank Mining go up and down completely randomly.
Pair Corralation between Algonquin Power and Millbank Mining
Assuming the 90 days trading horizon Algonquin Power Utilities is expected to generate 0.16 times more return on investment than Millbank Mining. However, Algonquin Power Utilities is 6.1 times less risky than Millbank Mining. It trades about 0.36 of its potential returns per unit of risk. Millbank Mining Corp is currently generating about -0.07 per unit of risk. If you would invest 2,330 in Algonquin Power Utilities on September 25, 2024 and sell it today you would earn a total of 110.00 from holding Algonquin Power Utilities or generate 4.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Algonquin Power Utilities vs. Millbank Mining Corp
Performance |
| Timeline |
| Algonquin Power Utilities |
| Millbank Mining Corp |
Algonquin Power and Millbank Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Algonquin Power and Millbank Mining
The main advantage of trading using opposite Algonquin Power and Millbank Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Algonquin Power position performs unexpectedly, Millbank 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 Millbank Mining will offset losses from the drop in Millbank Mining's long position.| Algonquin Power vs. Calian Technologies | Algonquin Power vs. Doman Building Materials | Algonquin Power vs. Firan Technology Group | Algonquin Power vs. Quorum Information Technologies |
| Millbank Mining vs. Algonquin Power Utilities | Millbank Mining vs. Canadian Utilities Limited | Millbank Mining vs. Falcon Energy Materials | Millbank Mining vs. Metalero Mining Corp |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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