Correlation Between New York and Algonquin Power

Can any of the company-specific risk be diversified away by investing in both New York 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 New York and Algonquin Power into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between New York Mortgage and Algonquin Power Utilities, you can compare the effects of market volatilities on New York 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 New York with a short position of Algonquin Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of New York and Algonquin Power.

Diversification Opportunities for New York and Algonquin Power

0.0

Correlation Coefficient

New York  Algonquin Power

Pay attention - limited upside

The 3 months correlation between New and Algonquin is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding New York Mortgage 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 New York 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 New York Mortgage 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 New York i.e., New York and Algonquin Power go up and down completely randomly.

Pair Corralation between New York and Algonquin Power

If you would invest  2,476  in New York Mortgage on December 1, 2024 and sell it today you would earn a total of  43.00  from holding New York Mortgage or generate 1.74% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

New York Mortgage  vs.  Algonquin Power Utilities

New York Mortgage

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in New York Mortgage are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, New York is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Algonquin Power Utilities

Risk-Adjusted Performance

Very Weak

Over the last 90 days Algonquin Power Utilities has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Algonquin Power is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with New York and Algonquin Power

The main advantage of trading using opposite New York and Algonquin Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New York 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.

The idea behind New York Mortgage and Algonquin Power Utilities 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .