Correlation Between OAKTRSPECLENDNEW and Algonquin Power
Can any of the company-specific risk be diversified away by investing in both OAKTRSPECLENDNEW 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 OAKTRSPECLENDNEW and Algonquin Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between OAKTRSPECLENDNEW and Algonquin Power Utilities, you can compare the effects of market volatilities on OAKTRSPECLENDNEW 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 OAKTRSPECLENDNEW with a short position of Algonquin Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of OAKTRSPECLENDNEW and Algonquin Power.
Diversification Opportunities for OAKTRSPECLENDNEW and Algonquin Power
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between OAKTRSPECLENDNEW and Algonquin is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding OAKTRSPECLENDNEW 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 OAKTRSPECLENDNEW 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 OAKTRSPECLENDNEW 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 OAKTRSPECLENDNEW i.e., OAKTRSPECLENDNEW and Algonquin Power go up and down completely randomly.
Pair Corralation between OAKTRSPECLENDNEW and Algonquin Power
Assuming the 90 days trading horizon OAKTRSPECLENDNEW is expected to generate 0.78 times more return on investment than Algonquin Power. However, OAKTRSPECLENDNEW is 1.29 times less risky than Algonquin Power. It trades about 0.0 of its potential returns per unit of risk. Algonquin Power Utilities is currently generating about -0.02 per unit of risk. If you would invest 1,614 in OAKTRSPECLENDNEW on August 31, 2024 and sell it today you would lose (106.00) from holding OAKTRSPECLENDNEW or give up 6.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
OAKTRSPECLENDNEW vs. Algonquin Power Utilities
Performance |
| Timeline |
| OAKTRSPECLENDNEW |
| Algonquin Power Utilities |
OAKTRSPECLENDNEW and Algonquin Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OAKTRSPECLENDNEW and Algonquin Power
The main advantage of trading using opposite OAKTRSPECLENDNEW and Algonquin Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OAKTRSPECLENDNEW 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.| OAKTRSPECLENDNEW vs. Apple Inc | OAKTRSPECLENDNEW vs. Apple Inc | OAKTRSPECLENDNEW vs. Apple Inc | OAKTRSPECLENDNEW vs. Apple Inc |
| Algonquin Power vs. Superior Plus Corp | Algonquin Power vs. NMI Holdings | Algonquin Power vs. Origin Agritech | Algonquin Power vs. SIVERS SEMICONDUCTORS AB |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |