Correlation Between Atlantica Sustainable and Orsted A/S
Can any of the company-specific risk be diversified away by investing in both Atlantica Sustainable and Orsted A/S 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 Atlantica Sustainable and Orsted A/S into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Atlantica Sustainable Infrastructure and Orsted AS, you can compare the effects of market volatilities on Atlantica Sustainable and Orsted A/S 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 Atlantica Sustainable with a short position of Orsted A/S. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atlantica Sustainable and Orsted A/S.
Diversification Opportunities for Atlantica Sustainable and Orsted A/S
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Atlantica and Orsted is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Atlantica Sustainable Infrastr and Orsted AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orsted A/S and Atlantica Sustainable 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 Atlantica Sustainable Infrastructure are associated (or correlated) with Orsted A/S. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orsted A/S has no effect on the direction of Atlantica Sustainable i.e., Atlantica Sustainable and Orsted A/S go up and down completely randomly.
Pair Corralation between Atlantica Sustainable and Orsted A/S
Allowing for the 90-day total investment horizon Atlantica Sustainable Infrastructure is expected to generate 0.02 times more return on investment than Orsted A/S. However, Atlantica Sustainable Infrastructure is 51.58 times less risky than Orsted A/S. It trades about 0.31 of its potential returns per unit of risk. Orsted AS is currently generating about -0.09 per unit of risk. If you would invest 2,200 in Atlantica Sustainable Infrastructure on August 24, 2024 and sell it today you would earn a total of 14.00 from holding Atlantica Sustainable Infrastructure or generate 0.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Atlantica Sustainable Infrastr vs. Orsted AS
Performance |
| Timeline |
| Atlantica Sustainable |
| Orsted A/S |
Atlantica Sustainable and Orsted A/S Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atlantica Sustainable and Orsted A/S
The main advantage of trading using opposite Atlantica Sustainable and Orsted A/S positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atlantica Sustainable position performs unexpectedly, Orsted A/S 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 Orsted A/S will offset losses from the drop in Orsted A/S's long position.| Atlantica Sustainable vs. Clearway Energy | Atlantica Sustainable vs. Brookfield Renewable Corp | Atlantica Sustainable vs. Nextera Energy Partners | Atlantica Sustainable vs. Brookfield Renewable Partners |
| Orsted A/S vs. Innergex Renewable Energy | Orsted A/S vs. Clearway Energy | Orsted A/S vs. Fusion Fuel Green | Orsted A/S 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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