Correlation Between Integrated Wind and Everfuel
Can any of the company-specific risk be diversified away by investing in both Integrated Wind and Everfuel 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 Everfuel 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 Everfuel AS, you can compare the effects of market volatilities on Integrated Wind and Everfuel 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 Everfuel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Integrated Wind and Everfuel.
Diversification Opportunities for Integrated Wind and Everfuel
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Integrated and Everfuel is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Integrated Wind Solutions and Everfuel AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Everfuel AS 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 Everfuel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Everfuel AS has no effect on the direction of Integrated Wind i.e., Integrated Wind and Everfuel go up and down completely randomly.
Pair Corralation between Integrated Wind and Everfuel
Assuming the 90 days trading horizon Integrated Wind Solutions is expected to under-perform the Everfuel. In addition to that, Integrated Wind is 1.69 times more volatile than Everfuel AS. It trades about -0.08 of its total potential returns per unit of risk. Everfuel AS is currently generating about 0.05 per unit of volatility. If you would invest 1,280 in Everfuel AS on September 1, 2024 and sell it today you would earn a total of 14.00 from holding Everfuel AS or generate 1.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Integrated Wind Solutions vs. Everfuel AS
Performance |
| Timeline |
| Integrated Wind Solutions |
| Everfuel AS |
Integrated Wind and Everfuel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Integrated Wind and Everfuel
The main advantage of trading using opposite Integrated Wind and Everfuel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Integrated Wind position performs unexpectedly, Everfuel 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 Everfuel will offset losses from the drop in Everfuel'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 |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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