Correlation Between CVW CLEANTECH and Algonquin Power
Can any of the company-specific risk be diversified away by investing in both CVW CLEANTECH 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 CVW CLEANTECH and Algonquin Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CVW CLEANTECH INC and Algonquin Power Utilities, you can compare the effects of market volatilities on CVW CLEANTECH 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 CVW CLEANTECH with a short position of Algonquin Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVW CLEANTECH and Algonquin Power.
Diversification Opportunities for CVW CLEANTECH and Algonquin Power
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between CVW and Algonquin is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding CVW CLEANTECH INC 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 CVW CLEANTECH 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 CVW CLEANTECH INC 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 CVW CLEANTECH i.e., CVW CLEANTECH and Algonquin Power go up and down completely randomly.
Pair Corralation between CVW CLEANTECH and Algonquin Power
Assuming the 90 days trading horizon CVW CLEANTECH INC is expected to under-perform the Algonquin Power. In addition to that, CVW CLEANTECH is 1.89 times more volatile than Algonquin Power Utilities. It trades about -0.01 of its total potential returns per unit of risk. Algonquin Power Utilities is currently generating about -0.01 per unit of volatility. If you would invest 470.00 in Algonquin Power Utilities on September 3, 2024 and sell it today you would lose (6.00) from holding Algonquin Power Utilities or give up 1.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CVW CLEANTECH INC vs. Algonquin Power Utilities
Performance |
| Timeline |
| CVW CLEANTECH INC |
| Algonquin Power Utilities |
CVW CLEANTECH and Algonquin Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CVW CLEANTECH and Algonquin Power
The main advantage of trading using opposite CVW CLEANTECH and Algonquin Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CVW CLEANTECH 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.| CVW CLEANTECH vs. Cass Information Systems | CVW CLEANTECH vs. Data3 Limited | CVW CLEANTECH vs. National Storage Affiliates | CVW CLEANTECH vs. TERADATA |
| Algonquin Power vs. Treasury Wine Estates | Algonquin Power vs. X FAB Silicon Foundries | Algonquin Power vs. Silicon Motion Technology | Algonquin Power vs. CVW CLEANTECH INC |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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