Correlation Between Algonquin Power and Clearway Energy
Can any of the company-specific risk be diversified away by investing in both Algonquin Power and Clearway Energy 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 Clearway Energy 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 Clearway Energy, you can compare the effects of market volatilities on Algonquin Power and Clearway Energy 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 Clearway Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Algonquin Power and Clearway Energy.
Diversification Opportunities for Algonquin Power and Clearway Energy
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Algonquin and Clearway is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Algonquin Power Utilities and Clearway Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clearway Energy 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 Clearway Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clearway Energy has no effect on the direction of Algonquin Power i.e., Algonquin Power and Clearway Energy go up and down completely randomly.
Pair Corralation between Algonquin Power and Clearway Energy
Considering the 90-day investment horizon Algonquin Power Utilities is expected to generate 0.94 times more return on investment than Clearway Energy. However, Algonquin Power Utilities is 1.06 times less risky than Clearway Energy. It trades about 0.12 of its potential returns per unit of risk. Clearway Energy is currently generating about 0.07 per unit of risk. If you would invest 425.00 in Algonquin Power Utilities on October 20, 2024 and sell it today you would earn a total of 16.00 from holding Algonquin Power Utilities or generate 3.76% 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. Clearway Energy
Performance |
| Timeline |
| Algonquin Power Utilities |
| Clearway Energy |
Algonquin Power and Clearway Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Algonquin Power and Clearway Energy
The main advantage of trading using opposite Algonquin Power and Clearway Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Algonquin Power position performs unexpectedly, Clearway Energy 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 Clearway Energy will offset losses from the drop in Clearway Energy's long position.| Algonquin Power vs. Brookfield Renewable Corp | Algonquin Power vs. Nextera Energy Partners | Algonquin Power vs. Clearway Energy Class | Algonquin Power vs. Clearway Energy |
| Clearway Energy vs. Brookfield Renewable Corp | Clearway Energy vs. Nextera Energy Partners | Clearway Energy vs. Brookfield Renewable Partners | Clearway Energy vs. Clearway Energy Class |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |