Correlation Between Algonquin Power and Internet Thailand

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

Diversification Opportunities for Algonquin Power and Internet Thailand

-0.12

Correlation Coefficient

Algonquin Power  Internet Thailand

Good diversification

The 3 months correlation between Algonquin and Internet is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Algonquin Power Utilities and Internet Thailand PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Internet Thailand PCL 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 Internet Thailand. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Internet Thailand PCL has no effect on the direction of Algonquin Power i.e., Algonquin Power and Internet Thailand go up and down completely randomly.

Pair Corralation between Algonquin Power and Internet Thailand

Assuming the 90 days horizon Algonquin Power Utilities is expected to generate 0.36 times more return on investment than Internet Thailand. However, Algonquin Power Utilities is 2.76 times less risky than Internet Thailand. It trades about 0.11 of its potential returns per unit of risk. Internet Thailand PCL is currently generating about -0.02 per unit of risk. If you would invest  420.00  in Algonquin Power Utilities on December 25, 2024 and sell it today you would earn a total of  47.00  from holding Algonquin Power Utilities or generate 11.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Algonquin Power Utilities  vs.  Internet Thailand PCL

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.

Internet Thailand PCL

Risk-Adjusted Performance

Very Weak

Over the last 90 days Internet Thailand PCL has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Algonquin Power and Internet Thailand

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

The idea behind Algonquin Power Utilities and Internet Thailand PCL 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.

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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.