Correlation Between Green Impact and TransAlta Renewables
Can any of the company-specific risk be diversified away by investing in both Green Impact and TransAlta Renewables 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 Green Impact and TransAlta Renewables into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Green Impact Partners and TransAlta Renewables, you can compare the effects of market volatilities on Green Impact and TransAlta Renewables 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 Green Impact with a short position of TransAlta Renewables. Check out your portfolio center. Please also check ongoing floating volatility patterns of Green Impact and TransAlta Renewables.
Diversification Opportunities for Green Impact and TransAlta Renewables
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Green and TransAlta is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Green Impact Partners and TransAlta Renewables in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TransAlta Renewables and Green Impact 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 Green Impact Partners are associated (or correlated) with TransAlta Renewables. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TransAlta Renewables has no effect on the direction of Green Impact i.e., Green Impact and TransAlta Renewables go up and down completely randomly.
Pair Corralation between Green Impact and TransAlta Renewables
If you would invest 1,020 in TransAlta Renewables on August 28, 2024 and sell it today you would earn a total of 0.00 from holding TransAlta Renewables or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Green Impact Partners vs. TransAlta Renewables
Performance |
| Timeline |
| Green Impact Partners |
| TransAlta Renewables |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Green Impact and TransAlta Renewables Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Green Impact and TransAlta Renewables
The main advantage of trading using opposite Green Impact and TransAlta Renewables positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Green Impact position performs unexpectedly, TransAlta Renewables 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 TransAlta Renewables will offset losses from the drop in TransAlta Renewables' long position.The idea behind Green Impact Partners and TransAlta Renewables 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.| TransAlta Renewables vs. Green Impact Partners | TransAlta Renewables vs. Algonquin Power Utilities | TransAlta Renewables vs. Renew Energy Global | TransAlta Renewables vs. Excelerate Energy |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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