Correlation Between Algonquin Power and Slate Grocery
Can any of the company-specific risk be diversified away by investing in both Algonquin Power and Slate Grocery 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 Slate Grocery 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 Slate Grocery REIT, you can compare the effects of market volatilities on Algonquin Power and Slate Grocery 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 Slate Grocery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Algonquin Power and Slate Grocery.
Diversification Opportunities for Algonquin Power and Slate Grocery
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Algonquin and Slate is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Algonquin Power Utilities and Slate Grocery REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Slate Grocery REIT 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 Slate Grocery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Slate Grocery REIT has no effect on the direction of Algonquin Power i.e., Algonquin Power and Slate Grocery go up and down completely randomly.
Pair Corralation between Algonquin Power and Slate Grocery
Assuming the 90 days trading horizon Algonquin Power is expected to generate 4.0 times less return on investment than Slate Grocery. But when comparing it to its historical volatility, Algonquin Power Utilities is 2.83 times less risky than Slate Grocery. It trades about 0.24 of its potential returns per unit of risk. Slate Grocery REIT is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest 960.00 in Slate Grocery REIT on September 3, 2024 and sell it today you would earn a total of 110.00 from holding Slate Grocery REIT or generate 11.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Algonquin Power Utilities vs. Slate Grocery REIT
Performance |
| Timeline |
| Algonquin Power Utilities |
| Slate Grocery REIT |
Algonquin Power and Slate Grocery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Algonquin Power and Slate Grocery
The main advantage of trading using opposite Algonquin Power and Slate Grocery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Algonquin Power position performs unexpectedly, Slate Grocery 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 Slate Grocery will offset losses from the drop in Slate Grocery's long position.| Algonquin Power vs. Berkshire Hathaway CDR | Algonquin Power vs. Microsoft Corp CDR | Algonquin Power vs. Apple Inc CDR | Algonquin Power vs. Alphabet Inc CDR |
| Slate Grocery vs. Dream Office Real | Slate Grocery vs. Profound Medical Corp | Slate Grocery vs. Brookfield Office Properties | Slate Grocery vs. Economic Investment Trust |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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