Correlation Between Orsted AS and TROPHY GAMES

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

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

Diversification Opportunities for Orsted AS and TROPHY GAMES

-0.12

Correlation Coefficient

Orsted AS  TROPHY GAMES

Good diversification

The 3 months correlation between Orsted and TROPHY is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Orsted AS and TROPHY GAMES Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TROPHY GAMES Development 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 TROPHY GAMES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TROPHY GAMES Development has no effect on the direction of Orsted AS i.e., Orsted AS and TROPHY GAMES go up and down completely randomly.

Pair Corralation between Orsted AS and TROPHY GAMES

Assuming the 90 days trading horizon Orsted AS is expected to under-perform the TROPHY GAMES. But the stock apears to be less risky and, when comparing its historical volatility, Orsted AS is 1.23 times less risky than TROPHY GAMES. The stock trades about -0.01 of its potential returns per unit of risk. The TROPHY GAMES Development is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  600.00  in TROPHY GAMES Development on December 25, 2024 and sell it today you would earn a total of  100.00  from holding TROPHY GAMES Development or generate 16.67% return on investment over 90 days.

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

Orsted AS  vs.  TROPHY GAMES Development

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.

TROPHY GAMES Development

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in TROPHY GAMES Development are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, TROPHY GAMES sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Orsted AS and TROPHY GAMES

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

The idea behind Orsted AS and TROPHY GAMES Development 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.