Correlation Between Vestas Wind and Broadwind
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By analyzing existing cross correlation between Vestas Wind Systems and Broadwind, you can compare the effects of market volatilities on Vestas Wind and Broadwind 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 Broadwind. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vestas Wind and Broadwind.
Diversification Opportunities for Vestas Wind and Broadwind
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Vestas and Broadwind is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Vestas Wind Systems and Broadwind in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Broadwind 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 Broadwind. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Broadwind has no effect on the direction of Vestas Wind i.e., Vestas Wind and Broadwind go up and down completely randomly.
Pair Corralation between Vestas Wind and Broadwind
Assuming the 90 days trading horizon Vestas Wind Systems is expected to under-perform the Broadwind. But the stock apears to be less risky and, when comparing its historical volatility, Vestas Wind Systems is 2.35 times less risky than Broadwind. The stock trades about -0.04 of its potential returns per unit of risk. The Broadwind is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 162.00 in Broadwind on September 2, 2024 and sell it today you would earn a total of 11.00 from holding Broadwind or generate 6.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vestas Wind Systems vs. Broadwind
Performance |
| Timeline |
| Vestas Wind Systems |
| Broadwind |
Vestas Wind and Broadwind Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vestas Wind and Broadwind
The main advantage of trading using opposite Vestas Wind and Broadwind positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vestas Wind position performs unexpectedly, Broadwind 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 Broadwind will offset losses from the drop in Broadwind's long position.| Vestas Wind vs. HYATT HOTELS A | Vestas Wind vs. Meli Hotels International | Vestas Wind vs. COVIVIO HOTELS INH | Vestas Wind vs. MCEWEN MINING INC |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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