Correlation Between Northland Power and Algonquin Power
Can any of the company-specific risk be diversified away by investing in both Northland Power 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 Northland Power and Algonquin Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Northland Power and Algonquin Power Utilities, you can compare the effects of market volatilities on Northland Power 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 Northland Power with a short position of Algonquin Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Northland Power and Algonquin Power.
Diversification Opportunities for Northland Power and Algonquin Power
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Northland and Algonquin is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Northland Power 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 Northland 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 Northland Power 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 Northland Power i.e., Northland Power and Algonquin Power go up and down completely randomly.
Pair Corralation between Northland Power and Algonquin Power
If you would invest 1,934 in Algonquin Power Utilities on October 26, 2024 and sell it today you would earn a total of 0.00 from holding Algonquin Power Utilities or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 1.69% |
| Values | Daily Returns |
Northland Power vs. Algonquin Power Utilities
Performance |
| Timeline |
| Northland Power |
| Algonquin Power Utilities |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Northland Power and Algonquin Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Northland Power and Algonquin Power
The main advantage of trading using opposite Northland Power and Algonquin Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Northland Power 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.| Northland Power vs. Tidewater Renewables | Northland Power vs. Renew Energy Global | Northland Power vs. Clearway Energy | Northland Power vs. Brookfield Renewable Partners |
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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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