Correlation Between Algonquin Power and Atlantic Power
Can any of the company-specific risk be diversified away by investing in both Algonquin Power and Atlantic 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 Algonquin Power and Atlantic Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Algonquin Power Utilities and Atlantic Power, you can compare the effects of market volatilities on Algonquin Power and Atlantic 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 Algonquin Power with a short position of Atlantic Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Algonquin Power and Atlantic Power.
Diversification Opportunities for Algonquin Power and Atlantic Power
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Algonquin and Atlantic is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Algonquin Power Utilities and Atlantic Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlantic Power and Algonquin 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 Algonquin Power Utilities are associated (or correlated) with Atlantic Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atlantic Power has no effect on the direction of Algonquin Power i.e., Algonquin Power and Atlantic Power go up and down completely randomly.
Pair Corralation between Algonquin Power and Atlantic Power
If you would invest 581.00 in Algonquin Power Utilities on December 29, 2023 and sell it today you would earn a total of 51.00 from holding Algonquin Power Utilities or generate 8.78% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 0.0% |
Values | Daily Returns |
Algonquin Power Utilities vs. Atlantic Power
Performance |
Timeline |
Algonquin Power Utilities |
Atlantic Power |
Risk-Adjusted Performance
0 of 100
Low | High |
Very Weak
Algonquin Power and Atlantic Power Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Algonquin Power and Atlantic Power
The main advantage of trading using opposite Algonquin Power and Atlantic Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Algonquin Power position performs unexpectedly, Atlantic 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 Atlantic Power will offset losses from the drop in Atlantic Power's long position.Algonquin Power vs. Atlantica Sustainable Infrastructure | Algonquin Power vs. Verde Clean Fuels | Algonquin Power vs. ReNew Energy Global | Algonquin Power vs. Ellomay Capital |
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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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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