Correlation Between Cadeler As and Integrated Wind
Can any of the company-specific risk be diversified away by investing in both Cadeler As and Integrated Wind 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 Cadeler As and Integrated Wind into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cadeler As and Integrated Wind Solutions, you can compare the effects of market volatilities on Cadeler As and Integrated Wind 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 Cadeler As with a short position of Integrated Wind. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cadeler As and Integrated Wind.
Diversification Opportunities for Cadeler As and Integrated Wind
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cadeler and Integrated is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Cadeler As and Integrated Wind Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Integrated Wind Solutions and Cadeler As 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 Cadeler As are associated (or correlated) with Integrated Wind. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Integrated Wind Solutions has no effect on the direction of Cadeler As i.e., Cadeler As and Integrated Wind go up and down completely randomly.
Pair Corralation between Cadeler As and Integrated Wind
Assuming the 90 days trading horizon Cadeler As is expected to generate 1.14 times less return on investment than Integrated Wind. But when comparing it to its historical volatility, Cadeler As is 1.78 times less risky than Integrated Wind. It trades about 0.04 of its potential returns per unit of risk. Integrated Wind Solutions is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 3,500 in Integrated Wind Solutions on November 2, 2024 and sell it today you would earn a total of 500.00 from holding Integrated Wind Solutions or generate 14.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Cadeler As vs. Integrated Wind Solutions
Performance |
| Timeline |
| Cadeler As |
| Integrated Wind Solutions |
Cadeler As and Integrated Wind Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cadeler As and Integrated Wind
The main advantage of trading using opposite Cadeler As and Integrated Wind positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cadeler As position performs unexpectedly, Integrated Wind 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 Integrated Wind will offset losses from the drop in Integrated Wind's long position.The idea behind Cadeler As and Integrated Wind Solutions 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.| Integrated Wind vs. Edda Wind ASA | Integrated Wind vs. Cloudberry Clean Energy | Integrated Wind vs. Cadeler As | Integrated Wind vs. Otovo AS |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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