Correlation Between Calian Technologies and Algonquin Power
Can any of the company-specific risk be diversified away by investing in both Calian Technologies and Algonquin Power 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 Calian Technologies and Algonquin Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Calian Technologies and Algonquin Power Utilities, you can compare the effects of market volatilities on Calian Technologies and Algonquin Power 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 Calian Technologies with a short position of Algonquin Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calian Technologies and Algonquin Power.
Diversification Opportunities for Calian Technologies and Algonquin Power
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Calian and Algonquin is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Calian Technologies and Algonquin Power Utilities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Algonquin Power Utilities and Calian Technologies 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 Calian Technologies are associated (or correlated) with Algonquin Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Algonquin Power Utilities has no effect on the direction of Calian Technologies i.e., Calian Technologies and Algonquin Power go up and down completely randomly.
Pair Corralation between Calian Technologies and Algonquin Power
Assuming the 90 days trading horizon Calian Technologies is expected to generate 6.67 times less return on investment than Algonquin Power. In addition to that, Calian Technologies is 2.9 times more volatile than Algonquin Power Utilities. It trades about 0.02 of its total potential returns per unit of risk. Algonquin Power Utilities is currently generating about 0.36 per unit of volatility. If you would invest 2,330 in Algonquin Power Utilities on September 26, 2024 and sell it today you would earn a total of 110.00 from holding Algonquin Power Utilities or generate 4.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Calian Technologies vs. Algonquin Power Utilities
Performance |
| Timeline |
| Calian Technologies |
| Algonquin Power Utilities |
Calian Technologies and Algonquin Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Calian Technologies and Algonquin Power
The main advantage of trading using opposite Calian Technologies and Algonquin Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calian Technologies position performs unexpectedly, Algonquin Power 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 Algonquin Power will offset losses from the drop in Algonquin Power's long position.| Calian Technologies vs. Enghouse Systems | Calian Technologies vs. Jamieson Wellness | Calian Technologies vs. TECSYS Inc | Calian Technologies vs. Descartes Systems Group |
| Algonquin Power vs. Chatham Rock Phosphate | Algonquin Power vs. Elixxer | Algonquin Power vs. Cielo Waste Solutions | Algonquin Power vs. Blockmate Ventures |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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