Correlation Between Innergex Renewable and Atco
Can any of the company-specific risk be diversified away by investing in both Innergex Renewable and Atco 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 Innergex Renewable and Atco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Innergex Renewable Energy and Atco, you can compare the effects of market volatilities on Innergex Renewable and Atco 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 Innergex Renewable with a short position of Atco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innergex Renewable and Atco.
Diversification Opportunities for Innergex Renewable and Atco
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Innergex and Atco is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Innergex Renewable Energy and Atco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atco and Innergex Renewable 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 Innergex Renewable Energy are associated (or correlated) with Atco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atco has no effect on the direction of Innergex Renewable i.e., Innergex Renewable and Atco go up and down completely randomly.
Pair Corralation between Innergex Renewable and Atco
Assuming the 90 days horizon Innergex Renewable Energy is expected to generate 3.47 times more return on investment than Atco. However, Innergex Renewable is 3.47 times more volatile than Atco. It trades about 0.02 of its potential returns per unit of risk. Atco is currently generating about 0.03 per unit of risk. If you would invest 971.00 in Innergex Renewable Energy on December 4, 2024 and sell it today you would lose (38.00) from holding Innergex Renewable Energy or give up 3.91% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 95.08% |
Values | Daily Returns |
Innergex Renewable Energy vs. Atco
Performance |
Timeline |
Innergex Renewable Energy |
Atco |
Innergex Renewable and Atco Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Innergex Renewable and Atco
The main advantage of trading using opposite Innergex Renewable and Atco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innergex Renewable position performs unexpectedly, Atco 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 Atco will offset losses from the drop in Atco's long position.Innergex Renewable vs. Orsted AS | Innergex Renewable vs. Clearway Energy | Innergex Renewable vs. Fusion Fuel Green | Innergex Renewable vs. Powertap Hydrogen Capital |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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