Correlation Between Orsted AS and SemiLEDS

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

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

Diversification Opportunities for Orsted AS and SemiLEDS

-0.01

Correlation Coefficient

Orsted AS  SemiLEDS

Good diversification

The 3 months correlation between Orsted and SemiLEDS is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Orsted AS ADR and SemiLEDS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SemiLEDS 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 ADR are associated (or correlated) with SemiLEDS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SemiLEDS has no effect on the direction of Orsted AS i.e., Orsted AS and SemiLEDS go up and down completely randomly.

Pair Corralation between Orsted AS and SemiLEDS

Assuming the 90 days horizon Orsted AS ADR is expected to generate 0.63 times more return on investment than SemiLEDS. However, Orsted AS ADR is 1.58 times less risky than SemiLEDS. It trades about 0.12 of its potential returns per unit of risk. SemiLEDS is currently generating about -0.03 per unit of risk. If you would invest  1,348  in Orsted AS ADR on April 24, 2025 and sell it today you would earn a total of  312.00  from holding Orsted AS ADR or generate 23.15% return on investment over 90 days.

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

Orsted AS ADR  vs.  SemiLEDS

Orsted AS ADR

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Orsted AS ADR are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile technical and fundamental indicators, Orsted AS showed solid returns over the last few months and may actually be approaching a breakup point.

SemiLEDS

Risk-Adjusted Performance

Very Weak

Over the last 90 days SemiLEDS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Orsted AS and SemiLEDS

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

The idea behind Orsted AS ADR and SemiLEDS 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.