Correlation Between Orsted AS and ViroGates

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

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

Diversification Opportunities for Orsted AS and ViroGates

0.43

Correlation Coefficient

Orsted AS  ViroGates

Very weak diversification

The 3 months correlation between Orsted and ViroGates is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Orsted AS and ViroGates AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ViroGates AS 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 ViroGates. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ViroGates AS has no effect on the direction of Orsted AS i.e., Orsted AS and ViroGates go up and down completely randomly.

Pair Corralation between Orsted AS and ViroGates

Assuming the 90 days trading horizon Orsted AS is expected to generate 0.47 times more return on investment than ViroGates. However, Orsted AS is 2.11 times less risky than ViroGates. It trades about -0.1 of its potential returns per unit of risk. ViroGates AS is currently generating about -0.08 per unit of risk. If you would invest  38,140  in Orsted AS on December 1, 2024 and sell it today you would lose (6,620) from holding Orsted AS or give up 17.36% of portfolio value over 90 days.

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

Orsted AS  vs.  ViroGates AS

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 unfluctuating 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.

ViroGates AS

Risk-Adjusted Performance

Very Weak

Over the last 90 days ViroGates AS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Orsted AS and ViroGates

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

The idea behind Orsted AS and ViroGates AS 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.

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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.