Correlation Between Hormel Foods and Algonquin Power
Can any of the company-specific risk be diversified away by investing in both Hormel Foods 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 Hormel Foods and Algonquin Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hormel Foods and Algonquin Power Utilities, you can compare the effects of market volatilities on Hormel Foods 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 Hormel Foods with a short position of Algonquin Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hormel Foods and Algonquin Power.
Diversification Opportunities for Hormel Foods and Algonquin Power
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hormel and Algonquin is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Hormel Foods 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 Hormel Foods 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 Hormel Foods 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 Hormel Foods i.e., Hormel Foods and Algonquin Power go up and down completely randomly.
Pair Corralation between Hormel Foods and Algonquin Power
Assuming the 90 days horizon Hormel Foods is expected to under-perform the Algonquin Power. But the stock apears to be less risky and, when comparing its historical volatility, Hormel Foods is 1.24 times less risky than Algonquin Power. The stock trades about -0.02 of its potential returns per unit of risk. The Algonquin Power Utilities is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 526.00 in Algonquin Power Utilities on September 14, 2024 and sell it today you would lose (96.00) from holding Algonquin Power Utilities or give up 18.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hormel Foods vs. Algonquin Power Utilities
Performance |
| Timeline |
| Hormel Foods |
| Algonquin Power Utilities |
Hormel Foods and Algonquin Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hormel Foods and Algonquin Power
The main advantage of trading using opposite Hormel Foods and Algonquin Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hormel Foods 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.| Hormel Foods vs. Guidewire Software | Hormel Foods vs. Carsales | Hormel Foods vs. GEELY AUTOMOBILE | Hormel Foods vs. NORTHEAST UTILITIES |
| Algonquin Power vs. Superior Plus Corp | Algonquin Power vs. SIVERS SEMICONDUCTORS AB | Algonquin Power vs. Norsk Hydro ASA | Algonquin Power vs. Reliance Steel Aluminum |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data |