Correlation Between Algonquin Power and Clearway Energy

Specify exactly 2 symbols:
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 Class, 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

-0.58
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Algonquin and Clearway is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Algonquin Power Utilities and Clearway Energy Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clearway Energy Class 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 Class 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

If you would invest  2,698  in Clearway Energy Class on August 24, 2024 and sell it today you would earn a total of  137.00  from holding Clearway Energy Class or generate 5.08% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy4.35%
ValuesDaily Returns

Algonquin Power Utilities  vs.  Clearway Energy Class

 Performance 
       Timeline  
Algonquin Power Utilities 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Algonquin Power Utilities has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Algonquin Power is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.
Clearway Energy Class 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Clearway Energy Class has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, Clearway Energy is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

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.
The idea behind Algonquin Power Utilities and Clearway Energy Class pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.

Other Complementary Tools

Financial Widgets
Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets
Price Ceiling Movement
Calculate and plot Price Ceiling Movement for different equity instruments
Portfolio Dashboard
Portfolio dashboard that provides centralized access to all your investments
Technical Analysis
Check basic technical indicators and analysis based on most latest market data
Analyst Advice
Analyst recommendations and target price estimates broken down by several categories