Correlation Between Brd Klee and Vestas Wind
Can any of the company-specific risk be diversified away by investing in both Brd Klee and Vestas Wind 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 Brd Klee and Vestas Wind into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brd Klee AS and Vestas Wind Systems, you can compare the effects of market volatilities on Brd Klee and Vestas Wind 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 Brd Klee with a short position of Vestas Wind. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brd Klee and Vestas Wind.
Diversification Opportunities for Brd Klee and Vestas Wind
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Brd and Vestas is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Brd Klee AS and Vestas Wind Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vestas Wind Systems and Brd Klee 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 Brd Klee AS are associated (or correlated) with Vestas Wind. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vestas Wind Systems has no effect on the direction of Brd Klee i.e., Brd Klee and Vestas Wind go up and down completely randomly.
Pair Corralation between Brd Klee and Vestas Wind
Assuming the 90 days trading horizon Brd Klee AS is expected to generate 1.05 times more return on investment than Vestas Wind. However, Brd Klee is 1.05 times more volatile than Vestas Wind Systems. It trades about 0.07 of its potential returns per unit of risk. Vestas Wind Systems is currently generating about -0.03 per unit of risk. If you would invest 384,000 in Brd Klee AS on December 2, 2024 and sell it today you would earn a total of 42,000 from holding Brd Klee AS or generate 10.94% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Brd Klee AS vs. Vestas Wind Systems
Performance |
Timeline |
Brd Klee AS |
Vestas Wind Systems |
Brd Klee and Vestas Wind Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Brd Klee and Vestas Wind
The main advantage of trading using opposite Brd Klee and Vestas Wind positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brd Klee position performs unexpectedly, Vestas Wind 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 Vestas Wind will offset losses from the drop in Vestas Wind's long position.Brd Klee vs. RIAS AS | Brd Klee vs. Investeringsselskabet Luxor AS | Brd Klee vs. Glunz Jensen | Brd Klee vs. SKAKO AS |
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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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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