Correlation Between Orsted AS and Formuepleje Mix

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

By analyzing existing cross correlation between Orsted AS and Formuepleje Mix Medium, you can compare the effects of market volatilities on Orsted AS and Formuepleje Mix 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 Formuepleje Mix. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orsted AS and Formuepleje Mix.

Diversification Opportunities for Orsted AS and Formuepleje Mix

-0.18

Correlation Coefficient

Orsted AS  Formuepleje Mix

Good diversification

The 3 months correlation between Orsted and Formuepleje is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Orsted AS and Formuepleje Mix Medium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Formuepleje Mix Medium 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 Formuepleje Mix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Formuepleje Mix Medium has no effect on the direction of Orsted AS i.e., Orsted AS and Formuepleje Mix go up and down completely randomly.

Pair Corralation between Orsted AS and Formuepleje Mix

Assuming the 90 days trading horizon Orsted AS is expected to generate 4.76 times more return on investment than Formuepleje Mix. However, Orsted AS is 4.76 times more volatile than Formuepleje Mix Medium. It trades about 0.35 of its potential returns per unit of risk. Formuepleje Mix Medium is currently generating about -0.12 per unit of risk. If you would invest  27,080  in Orsted AS on December 3, 2024 and sell it today you would earn a total of  4,440  from holding Orsted AS or generate 16.4% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	80.95%
Values	Daily Returns

Orsted AS  vs.  Formuepleje Mix Medium

Orsted AS

Risk-Adjusted Performance

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 April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Formuepleje Mix Medium

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Orsted AS and Formuepleje Mix

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

The idea behind Orsted AS and Formuepleje Mix Medium 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.