Correlation Between TransAlta Corp and Innergex Renewable
Can any of the company-specific risk be diversified away by investing in both TransAlta Corp 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 TransAlta Corp and Innergex Renewable into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TransAlta Corp and Innergex Renewable Energy, you can compare the effects of market volatilities on TransAlta Corp 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 TransAlta Corp with a short position of Innergex Renewable. Check out your portfolio center. Please also check ongoing floating volatility patterns of TransAlta Corp and Innergex Renewable.
Diversification Opportunities for TransAlta Corp and Innergex Renewable
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between TransAlta and Innergex is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding TransAlta 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 TransAlta Corp 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 TransAlta 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 TransAlta Corp i.e., TransAlta Corp and Innergex Renewable go up and down completely randomly.
Pair Corralation between TransAlta Corp and Innergex Renewable
Assuming the 90 days horizon TransAlta Corp is expected to under-perform the Innergex Renewable. In addition to that, TransAlta Corp is 2.35 times more volatile than Innergex Renewable Energy. It trades about -0.06 of its total potential returns per unit of risk. Innergex Renewable Energy is currently generating about 0.13 per unit of volatility. If you would invest 1,530 in Innergex Renewable Energy on October 25, 2024 and sell it today you would earn a total of 35.00 from holding Innergex Renewable Energy or generate 2.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TransAlta Corp vs. Innergex Renewable Energy
Performance |
| Timeline |
| TransAlta Corp |
| Innergex Renewable Energy |
TransAlta Corp and Innergex Renewable Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TransAlta Corp and Innergex Renewable
The main advantage of trading using opposite TransAlta Corp and Innergex Renewable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TransAlta Corp 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.| TransAlta Corp vs. Emera Inc | TransAlta Corp vs. TC Energy Corp | TransAlta Corp vs. Imperial Oil | TransAlta Corp vs. Sun Life Financial |
| 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Complementary Tools
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |