Correlation Between Carnegie Clean and Orsted AS
Can any of the company-specific risk be diversified away by investing in both Carnegie Clean and Orsted AS 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 Carnegie Clean and Orsted AS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carnegie Clean Energy and Orsted AS, you can compare the effects of market volatilities on Carnegie Clean and Orsted AS 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 Carnegie Clean with a short position of Orsted AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carnegie Clean and Orsted AS.
Diversification Opportunities for Carnegie Clean and Orsted AS
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Carnegie and Orsted is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Carnegie Clean Energy and Orsted AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orsted AS and Carnegie Clean 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 Carnegie Clean Energy are associated (or correlated) with Orsted AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orsted AS has no effect on the direction of Carnegie Clean i.e., Carnegie Clean and Orsted AS go up and down completely randomly.
Pair Corralation between Carnegie Clean and Orsted AS
Assuming the 90 days trading horizon Carnegie Clean Energy is expected to generate 1.62 times more return on investment than Orsted AS. However, Carnegie Clean is 1.62 times more volatile than Orsted AS. It trades about 0.04 of its potential returns per unit of risk. Orsted AS is currently generating about -0.21 per unit of risk. If you would invest 2.06 in Carnegie Clean Energy on November 3, 2024 and sell it today you would earn a total of 0.04 from holding Carnegie Clean Energy or generate 1.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Carnegie Clean Energy vs. Orsted AS
Performance |
| Timeline |
| Carnegie Clean Energy |
| Orsted AS |
Carnegie Clean and Orsted AS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carnegie Clean and Orsted AS
The main advantage of trading using opposite Carnegie Clean and Orsted AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carnegie Clean position performs unexpectedly, Orsted AS 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 AS will offset losses from the drop in Orsted AS's long position.| Carnegie Clean vs. China Resources Power | Carnegie Clean vs. NRG Energy | Carnegie Clean vs. Superior Plus Corp | Carnegie Clean vs. Origin Agritech |
| Orsted AS vs. Synovus Financial Corp | Orsted AS vs. JSC Halyk bank | Orsted AS vs. Harmony Gold Mining | Orsted AS vs. Virtu Financial |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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