Correlation Between Cadeler As and Ocean Sun
Can any of the company-specific risk be diversified away by investing in both Cadeler As and Ocean Sun 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 Ocean Sun into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cadeler As and Ocean Sun As, you can compare the effects of market volatilities on Cadeler As and Ocean Sun 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 Ocean Sun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cadeler As and Ocean Sun.
Diversification Opportunities for Cadeler As and Ocean Sun
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cadeler and Ocean is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Cadeler As and Ocean Sun As in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ocean Sun As 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 Ocean Sun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ocean Sun As has no effect on the direction of Cadeler As i.e., Cadeler As and Ocean Sun go up and down completely randomly.
Pair Corralation between Cadeler As and Ocean Sun
Assuming the 90 days trading horizon Cadeler As is expected to generate 0.39 times more return on investment than Ocean Sun. However, Cadeler As is 2.55 times less risky than Ocean Sun. It trades about 0.07 of its potential returns per unit of risk. Ocean Sun As is currently generating about -0.03 per unit of risk. If you would invest 3,998 in Cadeler As on September 4, 2024 and sell it today you would earn a total of 2,792 from holding Cadeler As or generate 69.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cadeler As vs. Ocean Sun As
Performance |
| Timeline |
| Cadeler As |
| Ocean Sun As |
Cadeler As and Ocean Sun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cadeler As and Ocean Sun
The main advantage of trading using opposite Cadeler As and Ocean Sun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cadeler As position performs unexpectedly, Ocean Sun 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 Ocean Sun will offset losses from the drop in Ocean Sun's long position.The idea behind Cadeler As and Ocean Sun As 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.| Ocean Sun vs. Lea Bank ASA | Ocean Sun vs. Nordic Mining ASA | Ocean Sun vs. Aasen Sparebank | Ocean Sun vs. Beerenberg 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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