Correlation Between Maxim Power and Innergex Renewable
Can any of the company-specific risk be diversified away by investing in both Maxim Power and Innergex Renewable 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 Maxim Power and Innergex Renewable into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Maxim Power Corp and Innergex Renewable Energy, you can compare the effects of market volatilities on Maxim Power and Innergex Renewable 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 Maxim Power with a short position of Innergex Renewable. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maxim Power and Innergex Renewable.
Diversification Opportunities for Maxim Power and Innergex Renewable
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Maxim and Innergex is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Maxim Power Corp and Innergex Renewable Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innergex Renewable Energy and Maxim Power 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 Maxim Power Corp are associated (or correlated) with Innergex Renewable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innergex Renewable Energy has no effect on the direction of Maxim Power i.e., Maxim Power and Innergex Renewable go up and down completely randomly.
Pair Corralation between Maxim Power and Innergex Renewable
Assuming the 90 days trading horizon Maxim Power Corp is expected to generate 3.34 times more return on investment than Innergex Renewable. However, Maxim Power is 3.34 times more volatile than Innergex Renewable Energy. It trades about 0.23 of its potential returns per unit of risk. Innergex Renewable Energy is currently generating about 0.13 per unit of risk. If you would invest 530.00 in Maxim Power Corp on October 25, 2024 and sell it today you would earn a total of 71.00 from holding Maxim Power Corp or generate 13.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Maxim Power Corp vs. Innergex Renewable Energy
Performance |
| Timeline |
| Maxim Power Corp |
| Innergex Renewable Energy |
Maxim Power and Innergex Renewable Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Maxim Power and Innergex Renewable
The main advantage of trading using opposite Maxim Power and Innergex Renewable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maxim Power position performs unexpectedly, Innergex Renewable 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 Innergex Renewable will offset losses from the drop in Innergex Renewable's long position.| Maxim Power vs. Caldwell Partners International | Maxim Power vs. Mccoy Global | Maxim Power vs. Pulse Seismic | Maxim Power vs. Currency Exchange International |
| Innergex Renewable vs. Renoworks Software | Innergex Renewable vs. Sparx Technology | Innergex Renewable vs. TUT Fitness Group | Innergex Renewable vs. TGS Esports |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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