Correlation Between Atlantica Sustainable and Fortum Oyj
Can any of the company-specific risk be diversified away by investing in both Atlantica Sustainable 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 Atlantica Sustainable and Fortum Oyj 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 Fortum Oyj, you can compare the effects of market volatilities on Atlantica Sustainable 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 Atlantica Sustainable with a short position of Fortum Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atlantica Sustainable and Fortum Oyj.
Diversification Opportunities for Atlantica Sustainable and Fortum Oyj
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Atlantica and Fortum is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Atlantica Sustainable Infrastr and Fortum Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fortum Oyj 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 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 Atlantica Sustainable i.e., Atlantica Sustainable and Fortum Oyj go up and down completely randomly.
Pair Corralation between Atlantica Sustainable and Fortum Oyj
Allowing for the 90-day total investment horizon Atlantica Sustainable Infrastructure is expected to generate 0.04 times more return on investment than Fortum Oyj. However, Atlantica Sustainable Infrastructure is 23.16 times less risky than Fortum Oyj. It trades about 0.57 of its potential returns per unit of risk. Fortum Oyj is currently generating about -0.12 per unit of risk. If you would invest 2,195 in Atlantica Sustainable Infrastructure on August 28, 2024 and sell it today you would earn a total of 19.00 from holding Atlantica Sustainable Infrastructure or generate 0.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Atlantica Sustainable Infrastr vs. Fortum Oyj
Performance |
| Timeline |
| Atlantica Sustainable |
| Fortum Oyj |
Atlantica Sustainable and Fortum Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atlantica Sustainable and Fortum Oyj
The main advantage of trading using opposite Atlantica Sustainable and Fortum Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atlantica Sustainable 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.| Atlantica Sustainable vs. Clearway Energy | Atlantica Sustainable vs. Brookfield Renewable Corp | Atlantica Sustainable vs. Nextera Energy Partners | Atlantica Sustainable vs. Brookfield Renewable Partners |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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