Correlation Between Orsted AS and PF BankNordik

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

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

Diversification Opportunities for Orsted AS and PF BankNordik

-0.82

Correlation Coefficient

Orsted AS  PF BankNordik

Pay attention - limited upside

The 3 months correlation between Orsted and BNORDIK-CSE is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Orsted AS and PF BankNordik in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PF BankNordik and Orsted AS 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 Orsted AS are associated (or correlated) with PF BankNordik. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PF BankNordik has no effect on the direction of Orsted AS i.e., Orsted AS and PF BankNordik go up and down completely randomly.

Pair Corralation between Orsted AS and PF BankNordik

Assuming the 90 days trading horizon Orsted AS is expected to under-perform the PF BankNordik. In addition to that, Orsted AS is 2.33 times more volatile than PF BankNordik. It trades about -0.12 of its total potential returns per unit of risk. PF BankNordik is currently generating about 0.0 per unit of volatility. If you would invest  16,400  in PF BankNordik on September 12, 2024 and sell it today you would earn a total of  0.00  from holding PF BankNordik or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	22.73%
Values	Daily Returns

Orsted AS  vs.  PF BankNordik

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 weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

PF BankNordik

Risk-Adjusted Performance

0 of 100

Solid

Over the last 90 days PF BankNordik has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite unfluctuating basic indicators, PF BankNordik may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Orsted AS and PF BankNordik

The main advantage of trading using opposite Orsted AS and PF BankNordik positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orsted AS position performs unexpectedly, PF BankNordik 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 PF BankNordik will offset losses from the drop in PF BankNordik's long position.

The idea behind Orsted AS and PF BankNordik 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.