Correlation Between Alpha Trust and Public Power

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

By analyzing existing cross correlation between Alpha Trust Andromeda and Public Power, you can compare the effects of market volatilities on Alpha Trust and Public 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 Alpha Trust with a short position of Public Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alpha Trust and Public Power.

Diversification Opportunities for Alpha Trust and Public Power

0.72

Correlation Coefficient

Alpha Trust  Public Power

Poor diversification

The 3 months correlation between Alpha and Public is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Alpha Trust Andromeda and Public Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Public Power and Alpha Trust 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 Alpha Trust Andromeda are associated (or correlated) with Public Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Public Power has no effect on the direction of Alpha Trust i.e., Alpha Trust and Public Power go up and down completely randomly.

Pair Corralation between Alpha Trust and Public Power

Assuming the 90 days trading horizon Alpha Trust is expected to generate 1.58 times less return on investment than Public Power. But when comparing it to its historical volatility, Alpha Trust Andromeda is 1.65 times less risky than Public Power. It trades about 0.15 of its potential returns per unit of risk. Public Power is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  1,300  in Public Power on April 21, 2025 and sell it today you would earn a total of  161.00  from holding Public Power or generate 12.38% return on investment over 90 days.

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

Alpha Trust Andromeda  vs.  Public Power

Alpha Trust Andromeda

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Alpha Trust Andromeda are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Alpha Trust may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Public Power

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Public Power are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak fundamental indicators, Public Power may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Alpha Trust and Public Power

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

The idea behind Alpha Trust Andromeda and Public Power 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..