Correlation Between Astra Energy and Fortum Oyj
Can any of the company-specific risk be diversified away by investing in both Astra Energy and Fortum Oyj 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 Astra Energy and Fortum Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Astra Energy and Fortum Oyj, you can compare the effects of market volatilities on Astra Energy and Fortum Oyj 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 Astra Energy with a short position of Fortum Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astra Energy and Fortum Oyj.
Diversification Opportunities for Astra Energy and Fortum Oyj
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Astra and Fortum is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Astra Energy and Fortum Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fortum Oyj and Astra Energy 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 Astra Energy are associated (or correlated) with Fortum Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fortum Oyj has no effect on the direction of Astra Energy i.e., Astra Energy and Fortum Oyj go up and down completely randomly.
Pair Corralation between Astra Energy and Fortum Oyj
Given the investment horizon of 90 days Astra Energy is expected to generate 3.99 times more return on investment than Fortum Oyj. However, Astra Energy is 3.99 times more volatile than Fortum Oyj. It trades about 0.03 of its potential returns per unit of risk. Fortum Oyj is currently generating about -0.12 per unit of risk. If you would invest 11.00 in Astra Energy on August 30, 2024 and sell it today you would earn a total of 0.00 from holding Astra Energy or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Astra Energy vs. Fortum Oyj
Performance |
| Timeline |
| Astra Energy |
| Fortum Oyj |
Astra Energy and Fortum Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astra Energy and Fortum Oyj
The main advantage of trading using opposite Astra Energy and Fortum Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astra Energy position performs unexpectedly, Fortum Oyj 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 Fortum Oyj will offset losses from the drop in Fortum Oyj's long position.| Astra Energy vs. Alternus Energy Group | Astra Energy vs. American Security Resources | Astra Energy vs. Carnegie Clean Energy | Astra Energy vs. Altius Renewable Royalties |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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