Correlation Between Copenhagen Airports and Orsted AS
Can any of the company-specific risk be diversified away by investing in both Copenhagen Airports and Orsted AS 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 Copenhagen Airports and Orsted AS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Copenhagen Airports AS and Orsted AS, you can compare the effects of market volatilities on Copenhagen Airports and Orsted AS 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 Copenhagen Airports with a short position of Orsted AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Copenhagen Airports and Orsted AS.
Diversification Opportunities for Copenhagen Airports and Orsted AS
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Copenhagen and Orsted is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Copenhagen Airports AS and Orsted AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orsted AS and Copenhagen Airports 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 Copenhagen Airports AS are associated (or correlated) with Orsted AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orsted AS has no effect on the direction of Copenhagen Airports i.e., Copenhagen Airports and Orsted AS go up and down completely randomly.
Pair Corralation between Copenhagen Airports and Orsted AS
Assuming the 90 days trading horizon Copenhagen Airports AS is expected to generate 6.6 times more return on investment than Orsted AS. However, Copenhagen Airports is 6.6 times more volatile than Orsted AS. It trades about 0.2 of its potential returns per unit of risk. Orsted AS is currently generating about -0.1 per unit of risk. If you would invest 395,000 in Copenhagen Airports AS on September 13, 2024 and sell it today you would earn a total of 217,000 from holding Copenhagen Airports AS or generate 54.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Copenhagen Airports AS vs. Orsted AS
Performance |
| Timeline |
| Copenhagen Airports |
| Orsted AS |
Copenhagen Airports and Orsted AS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Copenhagen Airports and Orsted AS
The main advantage of trading using opposite Copenhagen Airports and Orsted AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Copenhagen Airports position performs unexpectedly, Orsted AS 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 Orsted AS will offset losses from the drop in Orsted AS's long position.The idea behind Copenhagen Airports AS and Orsted AS pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Orsted AS vs. Carlsberg AS | Orsted AS vs. Copenhagen Airports AS | Orsted AS vs. Brd Klee AS | Orsted AS vs. Investeringsselskabet Luxor 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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