Correlation Between Integrated Wind and Bergen Carbon
Can any of the company-specific risk be diversified away by investing in both Integrated Wind and Bergen Carbon 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 Bergen Carbon 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 Bergen Carbon Solutions, you can compare the effects of market volatilities on Integrated Wind and Bergen Carbon 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 Bergen Carbon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Integrated Wind and Bergen Carbon.
Diversification Opportunities for Integrated Wind and Bergen Carbon
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Integrated and Bergen is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Integrated Wind Solutions and Bergen Carbon Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bergen Carbon Solutions 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 Bergen Carbon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bergen Carbon Solutions has no effect on the direction of Integrated Wind i.e., Integrated Wind and Bergen Carbon go up and down completely randomly.
Pair Corralation between Integrated Wind and Bergen Carbon
Assuming the 90 days trading horizon Integrated Wind Solutions is expected to generate 0.76 times more return on investment than Bergen Carbon. However, Integrated Wind Solutions is 1.32 times less risky than Bergen Carbon. It trades about 0.04 of its potential returns per unit of risk. Bergen Carbon Solutions is currently generating about -0.03 per unit of risk. If you would invest 3,360 in Integrated Wind Solutions on September 3, 2024 and sell it today you would earn a total of 1,520 from holding Integrated Wind Solutions or generate 45.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Integrated Wind Solutions vs. Bergen Carbon Solutions
Performance |
| Timeline |
| Integrated Wind Solutions |
| Bergen Carbon Solutions |
Integrated Wind and Bergen Carbon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Integrated Wind and Bergen Carbon
The main advantage of trading using opposite Integrated Wind and Bergen Carbon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Integrated Wind position performs unexpectedly, Bergen Carbon 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 Bergen Carbon will offset losses from the drop in Bergen Carbon'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 |
| Bergen Carbon vs. Jaeren Sparebank | Bergen Carbon vs. Polaris Media | Bergen Carbon vs. Nidaros Sparebank | Bergen Carbon vs. Sparebank 1 SMN |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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