Correlation Between Power Assets and Orsted A/S
Can any of the company-specific risk be diversified away by investing in both Power Assets and Orsted A/S 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 Power Assets and Orsted A/S into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Power Assets Holdings and Orsted AS, you can compare the effects of market volatilities on Power Assets and Orsted A/S 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 Power Assets with a short position of Orsted A/S. Check out your portfolio center. Please also check ongoing floating volatility patterns of Power Assets and Orsted A/S.
Diversification Opportunities for Power Assets and Orsted A/S
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Power and Orsted is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Power Assets Holdings and Orsted AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orsted A/S and Power Assets 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 Power Assets Holdings are associated (or correlated) with Orsted A/S. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orsted A/S has no effect on the direction of Power Assets i.e., Power Assets and Orsted A/S go up and down completely randomly.
Pair Corralation between Power Assets and Orsted A/S
Assuming the 90 days horizon Power Assets Holdings is expected to under-perform the Orsted A/S. But the pink sheet apears to be less risky and, when comparing its historical volatility, Power Assets Holdings is 1.94 times less risky than Orsted A/S. The pink sheet trades about -0.08 of its potential returns per unit of risk. The Orsted AS is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 5,659 in Orsted AS on January 24, 2024 and sell it today you would lose (341.00) from holding Orsted AS or give up 6.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Power Assets Holdings vs. Orsted AS
Performance |
| Timeline |
| Power Assets Holdings |
| Orsted A/S |
Power Assets and Orsted A/S Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Power Assets and Orsted A/S
The main advantage of trading using opposite Power Assets and Orsted A/S positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Power Assets position performs unexpectedly, Orsted A/S 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 A/S will offset losses from the drop in Orsted A/S's long position.| Power Assets vs. Kenon Holdings | Power Assets vs. NRG Energy | Power Assets vs. Vistra Energy Corp | Power Assets vs. GBT Technologies |
| Orsted A/S vs. Brenmiller Energy Ltd | Orsted A/S vs. Alternus Energy Group | Orsted A/S vs. American Security Resources | Orsted A/S vs. Mass Megawat Wind |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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