Correlation Between Energy Of and Innergex Renewable
Can any of the company-specific risk be diversified away by investing in both Energy Of and Innergex Renewable 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 Energy Of and Innergex Renewable into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Energy of Minas and Innergex Renewable Energy, you can compare the effects of market volatilities on Energy Of and Innergex Renewable 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 Energy Of with a short position of Innergex Renewable. Check out your portfolio center. Please also check ongoing floating volatility patterns of Energy Of and Innergex Renewable.
Diversification Opportunities for Energy Of and Innergex Renewable
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Energy and Innergex is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Energy of Minas and Innergex Renewable Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innergex Renewable Energy and Energy Of 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 Energy of Minas are associated (or correlated) with Innergex Renewable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innergex Renewable Energy has no effect on the direction of Energy Of i.e., Energy Of and Innergex Renewable go up and down completely randomly.
Pair Corralation between Energy Of and Innergex Renewable
Assuming the 90 days horizon Energy of Minas is expected to generate 0.45 times more return on investment than Innergex Renewable. However, Energy of Minas is 2.21 times less risky than Innergex Renewable. It trades about 0.01 of its potential returns per unit of risk. Innergex Renewable Energy is currently generating about -0.02 per unit of risk. If you would invest 252.00 in Energy of Minas on September 12, 2024 and sell it today you would earn a total of 0.00 from holding Energy of Minas or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Energy of Minas vs. Innergex Renewable Energy
Performance |
| Timeline |
| Energy of Minas |
| Innergex Renewable Energy |
Energy Of and Innergex Renewable Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Energy Of and Innergex Renewable
The main advantage of trading using opposite Energy Of and Innergex Renewable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Energy Of position performs unexpectedly, Innergex Renewable 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 Innergex Renewable will offset losses from the drop in Innergex Renewable's long position.| Energy Of vs. Atco | Energy Of vs. AuraSource | Energy Of vs. Canadian Utilities Limited | Energy Of vs. Engie SA ADR |
| Innergex Renewable vs. Atco | Innergex Renewable vs. Canadian Utilities Limited | Innergex Renewable vs. Engie SA ADR | Innergex Renewable vs. The AES |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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