Correlation Between Orsted AS and Bavarian Nordic
Can any of the company-specific risk be diversified away by investing in both Orsted AS 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 Orsted AS and Bavarian Nordic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Orsted AS and Bavarian Nordic, you can compare the effects of market volatilities on Orsted AS 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 Orsted AS with a short position of Bavarian Nordic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orsted AS and Bavarian Nordic.
Diversification Opportunities for Orsted AS and Bavarian Nordic
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Orsted and Bavarian is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Orsted AS and Bavarian Nordic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bavarian Nordic and Orsted AS 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 Orsted AS 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 Orsted AS i.e., Orsted AS and Bavarian Nordic go up and down completely randomly.
Pair Corralation between Orsted AS and Bavarian Nordic
Assuming the 90 days trading horizon Orsted AS is expected to under-perform the Bavarian Nordic. In addition to that, Orsted AS is 1.24 times more volatile than Bavarian Nordic. It trades about -0.11 of its total potential returns per unit of risk. Bavarian Nordic is currently generating about 0.07 per unit of volatility. If you would invest 19,200 in Bavarian Nordic on October 20, 2024 and sell it today you would earn a total of 435.00 from holding Bavarian Nordic or generate 2.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
Orsted AS vs. Bavarian Nordic
Performance |
| Timeline |
| Orsted AS |
| Bavarian Nordic |
Orsted AS and Bavarian Nordic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orsted AS and Bavarian Nordic
The main advantage of trading using opposite Orsted AS and Bavarian Nordic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orsted AS 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.| Orsted AS vs. Alefarm Brewing AS | Orsted AS vs. Kreditbanken AS | Orsted AS vs. Sydbank AS | Orsted AS vs. Danske Andelskassers Bank |
| 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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