Correlation Between Integrated Wind and Edda Wind
Can any of the company-specific risk be diversified away by investing in both Integrated Wind and Edda 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 Integrated Wind and Edda Wind 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 Edda Wind ASA, you can compare the effects of market volatilities on Integrated Wind and Edda 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 Integrated Wind with a short position of Edda Wind. Check out your portfolio center. Please also check ongoing floating volatility patterns of Integrated Wind and Edda Wind.
Diversification Opportunities for Integrated Wind and Edda Wind
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Integrated and Edda is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Integrated Wind Solutions and Edda Wind ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Edda Wind ASA 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 Edda Wind. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Edda Wind ASA has no effect on the direction of Integrated Wind i.e., Integrated Wind and Edda Wind go up and down completely randomly.
Pair Corralation between Integrated Wind and Edda Wind
Assuming the 90 days trading horizon Integrated Wind Solutions is expected to under-perform the Edda Wind. In addition to that, Integrated Wind is 1.09 times more volatile than Edda Wind ASA. It trades about -0.29 of its total potential returns per unit of risk. Edda Wind ASA is currently generating about 0.06 per unit of volatility. If you would invest 1,860 in Edda Wind ASA on October 21, 2024 and sell it today you would earn a total of 35.00 from holding Edda Wind ASA or generate 1.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Integrated Wind Solutions vs. Edda Wind ASA
Performance |
| Timeline |
| Integrated Wind Solutions |
| Edda Wind ASA |
Integrated Wind and Edda Wind Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Integrated Wind and Edda Wind
The main advantage of trading using opposite Integrated Wind and Edda Wind positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Integrated Wind position performs unexpectedly, Edda 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 Edda Wind will offset losses from the drop in Edda Wind'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 |
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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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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