Correlation Between BankIn Bredygt and Orsted AS

Can any of the company-specific risk be diversified away by investing in both BankIn Bredygt 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 BankIn Bredygt and Orsted AS into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BankIn Bredygt Klimaakt and Orsted AS, you can compare the effects of market volatilities on BankIn Bredygt 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 BankIn Bredygt with a short position of Orsted AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of BankIn Bredygt and Orsted AS.

Diversification Opportunities for BankIn Bredygt and Orsted AS

-0.43

Correlation Coefficient

BankIn Bredygt  Orsted AS

Very good diversification

The 3 months correlation between BankIn and Orsted is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding BankIn Bredygt Klimaakt and Orsted AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orsted AS and BankIn Bredygt 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 BankIn Bredygt Klimaakt 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 BankIn Bredygt i.e., BankIn Bredygt and Orsted AS go up and down completely randomly.

Pair Corralation between BankIn Bredygt and Orsted AS

Assuming the 90 days trading horizon BankIn Bredygt Klimaakt is expected to generate 0.45 times more return on investment than Orsted AS. However, BankIn Bredygt Klimaakt is 2.23 times less risky than Orsted AS. It trades about 0.16 of its potential returns per unit of risk. Orsted AS is currently generating about 0.0 per unit of risk. If you would invest  9,874  in BankIn Bredygt Klimaakt on September 3, 2024 and sell it today you would earn a total of  891.00  from holding BankIn Bredygt Klimaakt or generate 9.02% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	70.77%
Values	Daily Returns

BankIn Bredygt Klimaakt  vs.  Orsted AS

BankIn Bredygt Klimaakt

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in BankIn Bredygt Klimaakt are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak forward indicators, BankIn Bredygt may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Orsted AS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Orsted AS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Orsted AS is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with BankIn Bredygt and Orsted AS

The main advantage of trading using opposite BankIn Bredygt and Orsted AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BankIn Bredygt 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.

The idea behind BankIn Bredygt Klimaakt and Orsted AS 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.