Correlation Between Goodtech and Integrated Wind
Can any of the company-specific risk be diversified away by investing in both Goodtech 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 Goodtech and Integrated Wind into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goodtech and Integrated Wind Solutions, you can compare the effects of market volatilities on Goodtech 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 Goodtech with a short position of Integrated Wind. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goodtech and Integrated Wind.
Diversification Opportunities for Goodtech and Integrated Wind
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Goodtech and Integrated is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Goodtech 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 Goodtech 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 Goodtech 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 Goodtech i.e., Goodtech and Integrated Wind go up and down completely randomly.
Pair Corralation between Goodtech and Integrated Wind
Assuming the 90 days trading horizon Goodtech is expected to under-perform the Integrated Wind. In addition to that, Goodtech is 1.02 times more volatile than Integrated Wind Solutions. It trades about -0.16 of its total potential returns per unit of risk. Integrated Wind Solutions is currently generating about -0.08 per unit of volatility. If you would invest 5,050 in Integrated Wind Solutions on September 1, 2024 and sell it today you would lose (170.00) from holding Integrated Wind Solutions or give up 3.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goodtech vs. Integrated Wind Solutions
Performance |
| Timeline |
| Goodtech |
| Integrated Wind Solutions |
Goodtech and Integrated Wind Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goodtech and Integrated Wind
The main advantage of trading using opposite Goodtech and Integrated Wind positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goodtech 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.| Goodtech vs. Eidesvik Offshore ASA | Goodtech vs. Borgestad A | Goodtech vs. Kitron ASA | Goodtech vs. Havila Shipping ASA |
| 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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