Correlation Between Algonquin Power and AEON METALS

Can any of the company-specific risk be diversified away by investing in both Algonquin Power and AEON METALS 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 AEON METALS 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 AEON METALS LTD, you can compare the effects of market volatilities on Algonquin Power and AEON METALS 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 AEON METALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Algonquin Power and AEON METALS.

Diversification Opportunities for Algonquin Power and AEON METALS

0.0

Correlation Coefficient

Algonquin Power  AEON METALS

Pay attention - limited upside

The 3 months correlation between Algonquin and AEON is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Algonquin Power Utilities and AEON METALS LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AEON METALS LTD 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 AEON METALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AEON METALS LTD has no effect on the direction of Algonquin Power i.e., Algonquin Power and AEON METALS go up and down completely randomly.

Pair Corralation between Algonquin Power and AEON METALS

If you would invest  420.00  in Algonquin Power Utilities on December 22, 2024 and sell it today you would earn a total of  46.00  from holding Algonquin Power Utilities or generate 10.95% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

Algonquin Power Utilities  vs.  AEON METALS LTD

Algonquin Power Utilities

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Algonquin Power Utilities are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Algonquin Power may actually be approaching a critical reversion point that can send shares even higher in April 2025.

AEON METALS LTD

Risk-Adjusted Performance

Very Weak

Over the last 90 days AEON METALS LTD has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, AEON METALS is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Algonquin Power and AEON METALS

The main advantage of trading using opposite Algonquin Power and AEON METALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Algonquin Power position performs unexpectedly, AEON METALS 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 AEON METALS will offset losses from the drop in AEON METALS's long position.

The idea behind Algonquin Power Utilities and AEON METALS LTD pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.