Correlation Between Lerøy Seafood and Algonquin Power
Can any of the company-specific risk be diversified away by investing in both Lerøy Seafood 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 Lerøy Seafood and Algonquin Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lery Seafood Group and Algonquin Power Utilities, you can compare the effects of market volatilities on Lerøy Seafood 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 Lerøy Seafood with a short position of Algonquin Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lerøy Seafood and Algonquin Power.
Diversification Opportunities for Lerøy Seafood and Algonquin Power
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Lerøy and Algonquin is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Lery Seafood Group 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 Lerøy Seafood 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 Lery Seafood Group 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 Lerøy Seafood i.e., Lerøy Seafood and Algonquin Power go up and down completely randomly.
Pair Corralation between Lerøy Seafood and Algonquin Power
Assuming the 90 days horizon Lery Seafood Group is expected to generate 4.36 times more return on investment than Algonquin Power. However, Lerøy Seafood is 4.36 times more volatile than Algonquin Power Utilities. It trades about 0.06 of its potential returns per unit of risk. Algonquin Power Utilities is currently generating about -0.03 per unit of risk. If you would invest 91.00 in Lery Seafood Group on November 2, 2024 and sell it today you would earn a total of 386.00 from holding Lery Seafood Group or generate 424.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Lery Seafood Group vs. Algonquin Power Utilities
Performance |
| Timeline |
| Lery Seafood Group |
| Algonquin Power Utilities |
Lerøy Seafood and Algonquin Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lerøy Seafood and Algonquin Power
The main advantage of trading using opposite Lerøy Seafood and Algonquin Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lerøy Seafood 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.| Lerøy Seafood vs. Mowi ASA | Lerøy Seafood vs. LEROY SEAFOOD GRUNSPADR | Lerøy Seafood vs. Yihai International Holding | Lerøy Seafood vs. Lery Seafood Group |
| Algonquin Power vs. INVITATION HOMES DL | Algonquin Power vs. MAVEN WIRELESS SWEDEN | Algonquin Power vs. Corporate Office Properties | Algonquin Power vs. OFFICE DEPOT |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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