Correlation Between Edda Wind and Integrated Wind
Can any of the company-specific risk be diversified away by investing in both Edda Wind 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 Edda Wind and Integrated Wind into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Edda Wind ASA and Integrated Wind Solutions, you can compare the effects of market volatilities on Edda Wind 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 Edda Wind with a short position of Integrated Wind. Check out your portfolio center. Please also check ongoing floating volatility patterns of Edda Wind and Integrated Wind.
Diversification Opportunities for Edda Wind and Integrated Wind
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Edda and Integrated is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Edda Wind ASA 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 Edda Wind 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 Edda Wind ASA 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 Edda Wind i.e., Edda Wind and Integrated Wind go up and down completely randomly.
Pair Corralation between Edda Wind and Integrated Wind
Assuming the 90 days trading horizon Edda Wind ASA is expected to under-perform the Integrated Wind. But the stock apears to be less risky and, when comparing its historical volatility, Edda Wind ASA is 1.71 times less risky than Integrated Wind. The stock trades about -0.02 of its potential returns per unit of risk. The Integrated Wind Solutions is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 3,340 in Integrated Wind Solutions on November 27, 2024 and sell it today you would earn a total of 560.00 from holding Integrated Wind Solutions or generate 16.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Edda Wind ASA vs. Integrated Wind Solutions
Performance |
| Timeline |
| Edda Wind ASA |
| Integrated Wind Solutions |
Edda Wind and Integrated Wind Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Edda Wind and Integrated Wind
The main advantage of trading using opposite Edda Wind and Integrated Wind positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Edda Wind 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.| Edda Wind vs. Nordic Mining ASA | Edda Wind vs. Odfjell Technology | Edda Wind vs. Lery Seafood Group | Edda Wind vs. Nordhealth AS |
| 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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