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 ADR, 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
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Astra and Fortum is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Astra Energy and Fortum Oyj ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fortum Oyj ADR 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 ADR 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 4.61 times more return on investment than Fortum Oyj. However, Astra Energy is 4.61 times more volatile than Fortum Oyj ADR. It trades about 0.03 of its potential returns per unit of risk. Fortum Oyj ADR is currently generating about 0.02 per unit of risk. If you would invest 24.00 in Astra Energy on October 24, 2024 and sell it today you would lose (13.00) from holding Astra Energy or give up 54.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Astra Energy vs. Fortum Oyj ADR
Performance |
| Timeline |
| Astra Energy |
| Fortum Oyj ADR |
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. Constellation Energy Corp | Astra Energy vs. Verbund AG ADR | Astra Energy vs. VERBUND AG | Astra Energy vs. Orsted AS ADR |
| Fortum Oyj vs. Constellation Energy Corp | Fortum Oyj vs. Astra Energy | Fortum Oyj vs. Powertap Hydrogen Capital | Fortum Oyj vs. Brenmiller Energy Ltd |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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