Correlation Between Algonquin Power and Senvest Capital
Can any of the company-specific risk be diversified away by investing in both Algonquin Power and Senvest Capital 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 Senvest Capital 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 Senvest Capital, you can compare the effects of market volatilities on Algonquin Power and Senvest Capital 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 Senvest Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Algonquin Power and Senvest Capital.
Diversification Opportunities for Algonquin Power and Senvest Capital
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Algonquin and Senvest is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Algonquin Power Utilities and Senvest Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Senvest Capital 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 Senvest Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Senvest Capital has no effect on the direction of Algonquin Power i.e., Algonquin Power and Senvest Capital go up and down completely randomly.
Pair Corralation between Algonquin Power and Senvest Capital
Assuming the 90 days trading horizon Algonquin Power Utilities is expected to under-perform the Senvest Capital. In addition to that, Algonquin Power is 1.35 times more volatile than Senvest Capital. It trades about -0.05 of its total potential returns per unit of risk. Senvest Capital is currently generating about 0.04 per unit of volatility. If you would invest 32,500 in Senvest Capital on October 16, 2024 and sell it today you would earn a total of 5,750 from holding Senvest Capital or generate 17.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Algonquin Power Utilities vs. Senvest Capital
Performance |
| Timeline |
| Algonquin Power Utilities |
| Senvest Capital |
Algonquin Power and Senvest Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Algonquin Power and Senvest Capital
The main advantage of trading using opposite Algonquin Power and Senvest Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Algonquin Power position performs unexpectedly, Senvest Capital 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 Senvest Capital will offset losses from the drop in Senvest Capital's long position.| Algonquin Power vs. Fortis Inc | Algonquin Power vs. Enbridge | Algonquin Power vs. Telus Corp | Algonquin Power vs. Brookfield Renewable Partners |
| Senvest Capital vs. Gfl Environmental Holdings | Senvest Capital vs. DIRTT Environmental Solutions | Senvest Capital vs. Canadian Utilities Limited | Senvest Capital vs. T2 Metals 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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