Correlation Between Algonquin Power and Accelerate Canadian
Can any of the company-specific risk be diversified away by investing in both Algonquin Power and Accelerate Canadian 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 Accelerate Canadian 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 Accelerate Canadian Long, you can compare the effects of market volatilities on Algonquin Power and Accelerate Canadian 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 Accelerate Canadian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Algonquin Power and Accelerate Canadian.
Diversification Opportunities for Algonquin Power and Accelerate Canadian
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Algonquin and Accelerate is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Algonquin Power Utilities and Accelerate Canadian Long in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Accelerate Canadian Long 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 Accelerate Canadian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Accelerate Canadian Long has no effect on the direction of Algonquin Power i.e., Algonquin Power and Accelerate Canadian go up and down completely randomly.
Pair Corralation between Algonquin Power and Accelerate Canadian
Assuming the 90 days trading horizon Algonquin Power Utilities is expected to under-perform the Accelerate Canadian. In addition to that, Algonquin Power is 2.19 times more volatile than Accelerate Canadian Long. It trades about -0.04 of its total potential returns per unit of risk. Accelerate Canadian Long is currently generating about 0.11 per unit of volatility. If you would invest 2,074 in Accelerate Canadian Long on September 12, 2024 and sell it today you would earn a total of 675.00 from holding Accelerate Canadian Long or generate 32.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Algonquin Power Utilities vs. Accelerate Canadian Long
Performance |
| Timeline |
| Algonquin Power Utilities |
| Accelerate Canadian Long |
Algonquin Power and Accelerate Canadian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Algonquin Power and Accelerate Canadian
The main advantage of trading using opposite Algonquin Power and Accelerate Canadian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Algonquin Power position performs unexpectedly, Accelerate Canadian 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 Accelerate Canadian will offset losses from the drop in Accelerate Canadian's long position.| Algonquin Power vs. Fortis Inc | Algonquin Power vs. Enbridge | Algonquin Power vs. Telus Corp | Algonquin Power vs. Brookfield Renewable Partners |
| Accelerate Canadian vs. Enbridge Pref 5 | Accelerate Canadian vs. Enbridge Pref 11 | Accelerate Canadian vs. Enbridge Pref L | Accelerate Canadian vs. E Split 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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