Correlation Between Innergex Renewable and Capstone Infrastructure
Can any of the company-specific risk be diversified away by investing in both Innergex Renewable and Capstone Infrastructure 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 Innergex Renewable and Capstone Infrastructure into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Innergex Renewable Energy and Capstone Infrastructure Corp, you can compare the effects of market volatilities on Innergex Renewable and Capstone Infrastructure 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 Innergex Renewable with a short position of Capstone Infrastructure. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innergex Renewable and Capstone Infrastructure.
Diversification Opportunities for Innergex Renewable and Capstone Infrastructure
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Innergex and Capstone is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Innergex Renewable Energy and Capstone Infrastructure Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capstone Infrastructure and Innergex Renewable 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 Innergex Renewable Energy are associated (or correlated) with Capstone Infrastructure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capstone Infrastructure has no effect on the direction of Innergex Renewable i.e., Innergex Renewable and Capstone Infrastructure go up and down completely randomly.
Pair Corralation between Innergex Renewable and Capstone Infrastructure
Assuming the 90 days trading horizon Innergex Renewable Energy is expected to generate 1.3 times more return on investment than Capstone Infrastructure. However, Innergex Renewable is 1.3 times more volatile than Capstone Infrastructure Corp. It trades about 0.14 of its potential returns per unit of risk. Capstone Infrastructure Corp is currently generating about 0.15 per unit of risk. If you would invest 1,460 in Innergex Renewable Energy on October 24, 2024 and sell it today you would earn a total of 105.00 from holding Innergex Renewable Energy or generate 7.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Innergex Renewable Energy vs. Capstone Infrastructure Corp
Performance |
| Timeline |
| Innergex Renewable Energy |
| Capstone Infrastructure |
Innergex Renewable and Capstone Infrastructure Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Innergex Renewable and Capstone Infrastructure
The main advantage of trading using opposite Innergex Renewable and Capstone Infrastructure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innergex Renewable position performs unexpectedly, Capstone Infrastructure 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 Capstone Infrastructure will offset losses from the drop in Capstone Infrastructure's long position.| Innergex Renewable vs. Vizsla Silver Corp | Innergex Renewable vs. Sparx Technology | Innergex Renewable vs. Upstart Investments | Innergex Renewable vs. Globex Mining Enterprises |
| Capstone Infrastructure vs. Brookfield Renewable Partners | Capstone Infrastructure vs. TransAlta Corp | Capstone Infrastructure vs. Transalta A Cum | Capstone Infrastructure vs. Innergex Renewable 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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