Correlation Between Innergex Renewable and Energy Of
Can any of the company-specific risk be diversified away by investing in both Innergex Renewable and Energy Of 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 Energy Of 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 Energy of Minas, you can compare the effects of market volatilities on Innergex Renewable and Energy Of 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 Energy Of. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innergex Renewable and Energy Of.
Diversification Opportunities for Innergex Renewable and Energy Of
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Innergex and Energy is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Innergex Renewable Energy and Energy of Minas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Energy of Minas 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 Energy Of. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Energy of Minas has no effect on the direction of Innergex Renewable i.e., Innergex Renewable and Energy Of go up and down completely randomly.
Pair Corralation between Innergex Renewable and Energy Of
Assuming the 90 days horizon Innergex Renewable Energy is expected to generate 1.0 times more return on investment than Energy Of. However, Innergex Renewable is 1.0 times more volatile than Energy of Minas. It trades about 0.04 of its potential returns per unit of risk. Energy of Minas is currently generating about -0.12 per unit of risk. If you would invest 640.00 in Innergex Renewable Energy on September 4, 2024 and sell it today you would earn a total of 10.00 from holding Innergex Renewable Energy or generate 1.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Innergex Renewable Energy vs. Energy of Minas
Performance |
| Timeline |
| Innergex Renewable Energy |
| Energy of Minas |
Innergex Renewable and Energy Of Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Innergex Renewable and Energy Of
The main advantage of trading using opposite Innergex Renewable and Energy Of positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innergex Renewable position performs unexpectedly, Energy Of 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 Energy Of will offset losses from the drop in Energy Of's long position.| Innergex Renewable vs. Energy of Minas | Innergex Renewable vs. The AES | Innergex Renewable vs. Sempra Energy | Innergex Renewable vs. Iberdrola SA |
| Energy Of vs. Atco | Energy Of vs. AuraSource | Energy Of vs. Canadian Utilities Limited | Energy Of vs. Engie SA ADR |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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