Correlation Between Algonquin Power and Winshear Gold
Can any of the company-specific risk be diversified away by investing in both Algonquin Power and Winshear Gold 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 Winshear Gold 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 Winshear Gold Corp, you can compare the effects of market volatilities on Algonquin Power and Winshear Gold 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 Winshear Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Algonquin Power and Winshear Gold.
Diversification Opportunities for Algonquin Power and Winshear Gold
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Algonquin and Winshear is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Algonquin Power Utilities and Winshear Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Winshear Gold 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 Winshear Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Winshear Gold Corp has no effect on the direction of Algonquin Power i.e., Algonquin Power and Winshear Gold go up and down completely randomly.
Pair Corralation between Algonquin Power and Winshear Gold
Assuming the 90 days trading horizon Algonquin Power is expected to generate 9.77 times less return on investment than Winshear Gold. But when comparing it to its historical volatility, Algonquin Power Utilities is 15.18 times less risky than Winshear Gold. It trades about 0.05 of its potential returns per unit of risk. Winshear Gold Corp is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 13.00 in Winshear Gold Corp on November 28, 2024 and sell it today you would lose (2.00) from holding Winshear Gold Corp or give up 15.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Algonquin Power Utilities vs. Winshear Gold Corp
Performance |
| Timeline |
| Algonquin Power Utilities |
| Winshear Gold Corp |
Algonquin Power and Winshear Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Algonquin Power and Winshear Gold
The main advantage of trading using opposite Algonquin Power and Winshear Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Algonquin Power position performs unexpectedly, Winshear Gold 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 Winshear Gold will offset losses from the drop in Winshear Gold's long position.| Algonquin Power vs. Calibre Mining Corp | Algonquin Power vs. Quipt Home Medical | Algonquin Power vs. Verizon Communications CDR | Algonquin Power vs. Marimaca Copper Corp |
| Winshear Gold vs. Magna Mining | Winshear Gold vs. Canso Select Opportunities | Winshear Gold vs. Vizsla Silver Corp | Winshear Gold vs. Americas Silver 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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