Correlation Between Vestas Wind and Netcompany Group
Can any of the company-specific risk be diversified away by investing in both Vestas Wind and Netcompany Group 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 Netcompany Group 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 Netcompany Group AS, you can compare the effects of market volatilities on Vestas Wind and Netcompany Group 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 Netcompany Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vestas Wind and Netcompany Group.
Diversification Opportunities for Vestas Wind and Netcompany Group
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Vestas and Netcompany is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Vestas Wind Systems and Netcompany Group AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Netcompany Group 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 Netcompany Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Netcompany Group has no effect on the direction of Vestas Wind i.e., Vestas Wind and Netcompany Group go up and down completely randomly.
Pair Corralation between Vestas Wind and Netcompany Group
Assuming the 90 days trading horizon Vestas Wind Systems is expected to under-perform the Netcompany Group. In addition to that, Vestas Wind is 2.94 times more volatile than Netcompany Group AS. It trades about -0.07 of its total potential returns per unit of risk. Netcompany Group AS is currently generating about 0.29 per unit of volatility. If you would invest 34,160 in Netcompany Group AS on September 19, 2024 and sell it today you would earn a total of 2,560 from holding Netcompany Group AS or generate 7.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vestas Wind Systems vs. Netcompany Group AS
Performance |
| Timeline |
| Vestas Wind Systems |
| Netcompany Group |
Vestas Wind and Netcompany Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vestas Wind and Netcompany Group
The main advantage of trading using opposite Vestas Wind and Netcompany Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vestas Wind position performs unexpectedly, Netcompany Group 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 Netcompany Group will offset losses from the drop in Netcompany Group's long position.| Vestas Wind vs. Genmab AS | Vestas Wind vs. Danske Bank AS | Vestas Wind vs. Ambu AS | Vestas Wind vs. Bavarian Nordic |
| Netcompany Group vs. GN Store Nord | Netcompany Group vs. Ambu AS | Netcompany Group vs. ROCKWOOL International AS | Netcompany Group vs. Genmab 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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