Correlation Between Vestas Wind and Nordea Invest

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Can any of the company-specific risk be diversified away by investing in both Vestas Wind and Nordea Invest 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 Vestas Wind and Nordea Invest into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vestas Wind Systems and Nordea Invest Stabile, you can compare the effects of market volatilities on Vestas Wind and Nordea Invest 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 Vestas Wind with a short position of Nordea Invest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vestas Wind and Nordea Invest.

Diversification Opportunities for Vestas Wind and Nordea Invest

-0.69
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Vestas and Nordea is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Vestas Wind Systems and Nordea Invest Stabile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nordea Invest Stabile and Vestas 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 Vestas Wind Systems are associated (or correlated) with Nordea Invest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nordea Invest Stabile has no effect on the direction of Vestas Wind i.e., Vestas Wind and Nordea Invest go up and down completely randomly.

Pair Corralation between Vestas Wind and Nordea Invest

Assuming the 90 days trading horizon Vestas Wind Systems is expected to under-perform the Nordea Invest. In addition to that, Vestas Wind is 4.62 times more volatile than Nordea Invest Stabile. It trades about -0.17 of its total potential returns per unit of risk. Nordea Invest Stabile is currently generating about 0.0 per unit of volatility. If you would invest  30,900  in Nordea Invest Stabile on September 19, 2024 and sell it today you would earn a total of  0.00  from holding Nordea Invest Stabile or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy92.86%
ValuesDaily Returns

Vestas Wind Systems  vs.  Nordea Invest Stabile

 Performance 
       Timeline  
Vestas Wind Systems 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Vestas Wind Systems has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.
Nordea Invest Stabile 

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Nordea Invest Stabile are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Nordea Invest is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Vestas Wind and Nordea Invest Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Vestas Wind and Nordea Invest

The main advantage of trading using opposite Vestas Wind and Nordea Invest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vestas Wind position performs unexpectedly, Nordea Invest 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 Nordea Invest will offset losses from the drop in Nordea Invest's long position.
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The idea behind Vestas Wind Systems and Nordea Invest Stabile 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.
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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 CEOs Directory module to screen CEOs from public companies around the world.

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