Correlation Between Orsted AS and Nykredit Invest

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

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

Diversification Opportunities for Orsted AS and Nykredit Invest

0.1

Correlation Coefficient

Orsted AS  Nykredit Invest

Average diversification

The 3 months correlation between Orsted and Nykredit is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Orsted AS and Nykredit Invest Korte in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nykredit Invest Korte 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 Nykredit Invest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nykredit Invest Korte has no effect on the direction of Orsted AS i.e., Orsted AS and Nykredit Invest go up and down completely randomly.

Pair Corralation between Orsted AS and Nykredit Invest

Assuming the 90 days trading horizon Orsted AS is expected to under-perform the Nykredit Invest. In addition to that, Orsted AS is 25.86 times more volatile than Nykredit Invest Korte. It trades about -0.01 of its total potential returns per unit of risk. Nykredit Invest Korte is currently generating about 0.07 per unit of volatility. If you would invest  9,939  in Nykredit Invest Korte on December 30, 2024 and sell it today you would earn a total of  48.00  from holding Nykredit Invest Korte or generate 0.48% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Orsted AS  vs.  Nykredit Invest Korte

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 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.

Nykredit Invest Korte

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Nykredit Invest Korte are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, Nykredit Invest is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Orsted AS and Nykredit Invest

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

The idea behind Orsted AS and Nykredit Invest Korte 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.