Correlation Between Strategic Investments and Orsted AS
Can any of the company-specific risk be diversified away by investing in both Strategic Investments 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 Strategic Investments and Orsted AS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Strategic Investments AS and Orsted AS, you can compare the effects of market volatilities on Strategic Investments 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 Strategic Investments with a short position of Orsted AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Strategic Investments and Orsted AS.
Diversification Opportunities for Strategic Investments and Orsted AS
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Strategic and Orsted is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Strategic Investments AS and Orsted AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orsted AS and Strategic Investments 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 Strategic Investments 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 Strategic Investments i.e., Strategic Investments and Orsted AS go up and down completely randomly.
Pair Corralation between Strategic Investments and Orsted AS
Assuming the 90 days trading horizon Strategic Investments AS is expected to generate 1.34 times more return on investment than Orsted AS. However, Strategic Investments is 1.34 times more volatile than Orsted AS. It trades about 0.02 of its potential returns per unit of risk. Orsted AS is currently generating about -0.15 per unit of risk. If you would invest 105.00 in Strategic Investments AS on August 29, 2024 and sell it today you would earn a total of 0.00 from holding Strategic Investments AS or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Strategic Investments AS vs. Orsted AS
Performance |
| Timeline |
| Strategic Investments |
| Orsted AS |
Strategic Investments and Orsted AS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Strategic Investments and Orsted AS
The main advantage of trading using opposite Strategic Investments and Orsted AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Strategic Investments 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.| Strategic Investments vs. SKAKO AS | Strategic Investments vs. Rovsing AS | Strategic Investments vs. Bavarian Nordic | Strategic Investments vs. Gyldendal AS |
| Orsted AS vs. Jeudan | Orsted AS vs. Investeringsselskabet Luxor AS | Orsted AS vs. Fast Ejendom | Orsted AS vs. Prime Office 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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