Correlation Between Identiv and Algonquin Power
Can any of the company-specific risk be diversified away by investing in both Identiv 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 Identiv and Algonquin Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Identiv and Algonquin Power Utilities, you can compare the effects of market volatilities on Identiv 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 Identiv with a short position of Algonquin Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Identiv and Algonquin Power.
Diversification Opportunities for Identiv and Algonquin Power
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Identiv and Algonquin is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Identiv 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 Identiv 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 Identiv 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 Identiv i.e., Identiv and Algonquin Power go up and down completely randomly.
Pair Corralation between Identiv and Algonquin Power
Assuming the 90 days trading horizon Identiv is expected to under-perform the Algonquin Power. In addition to that, Identiv is 1.83 times more volatile than Algonquin Power Utilities. It trades about -0.1 of its total potential returns per unit of risk. Algonquin Power Utilities is currently generating about 0.21 per unit of volatility. If you would invest 433.00 in Algonquin Power Utilities on November 27, 2024 and sell it today you would earn a total of 31.00 from holding Algonquin Power Utilities or generate 7.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Identiv vs. Algonquin Power Utilities
Performance |
| Timeline |
| Identiv |
| Algonquin Power Utilities |
Identiv and Algonquin Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Identiv and Algonquin Power
The main advantage of trading using opposite Identiv and Algonquin Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Identiv 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.| Identiv vs. Discover Financial Services | Identiv vs. Sligro Food Group | Identiv vs. REVO INSURANCE SPA | Identiv vs. EBRO FOODS |
| Algonquin Power vs. STMICROELECTRONICS | Algonquin Power vs. UMC Electronics Co | Algonquin Power vs. Schweizer Electronic AG | Algonquin Power vs. Nucletron Electronic Aktiengesellschaft |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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