Correlation Between Integrated Wind and Bavarian Nordic
Can any of the company-specific risk be diversified away by investing in both Integrated Wind and Bavarian Nordic 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 Integrated Wind and Bavarian Nordic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Integrated Wind Solutions and Bavarian Nordic, you can compare the effects of market volatilities on Integrated Wind and Bavarian Nordic 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 Integrated Wind with a short position of Bavarian Nordic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Integrated Wind and Bavarian Nordic.
Diversification Opportunities for Integrated Wind and Bavarian Nordic
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Integrated and Bavarian is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Integrated Wind Solutions and Bavarian Nordic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bavarian Nordic and Integrated 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 Integrated Wind Solutions are associated (or correlated) with Bavarian Nordic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bavarian Nordic has no effect on the direction of Integrated Wind i.e., Integrated Wind and Bavarian Nordic go up and down completely randomly.
Pair Corralation between Integrated Wind and Bavarian Nordic
Assuming the 90 days trading horizon Integrated Wind Solutions is expected to generate 0.36 times more return on investment than Bavarian Nordic. However, Integrated Wind Solutions is 2.76 times less risky than Bavarian Nordic. It trades about -0.08 of its potential returns per unit of risk. Bavarian Nordic is currently generating about -0.08 per unit of risk. 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 |
Integrated Wind Solutions vs. Bavarian Nordic
Performance |
| Timeline |
| Integrated Wind Solutions |
| Bavarian Nordic |
Integrated Wind and Bavarian Nordic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Integrated Wind and Bavarian Nordic
The main advantage of trading using opposite Integrated Wind and Bavarian Nordic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Integrated Wind position performs unexpectedly, Bavarian Nordic 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 Bavarian Nordic will offset losses from the drop in Bavarian Nordic's long position.| Integrated Wind vs. Edda Wind ASA | Integrated Wind vs. Cloudberry Clean Energy | Integrated Wind vs. Cadeler As | Integrated Wind vs. Otovo AS |
| Bavarian Nordic vs. Ambu AS | Bavarian Nordic vs. Danske Bank AS | Bavarian Nordic vs. Genmab AS | Bavarian Nordic vs. DSV Panalpina 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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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