Correlation Between Nordea North and Nordea Norge

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

By analyzing existing cross correlation between Nordea North American and Nordea Norge Verdi, you can compare the effects of market volatilities on Nordea North and Nordea Norge 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 Nordea North with a short position of Nordea Norge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordea North and Nordea Norge.

Diversification Opportunities for Nordea North and Nordea Norge

0.0

Correlation Coefficient

Nordea North  Nordea Norge

Pay attention - limited upside

The 3 months correlation between Nordea and Nordea is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Nordea North American and Nordea Norge Verdi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nordea Norge Verdi and Nordea North 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 Nordea North American are associated (or correlated) with Nordea Norge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nordea Norge Verdi has no effect on the direction of Nordea North i.e., Nordea North and Nordea Norge go up and down completely randomly.

Pair Corralation between Nordea North and Nordea Norge

If you would invest  48,043  in Nordea North American on October 25, 2024 and sell it today you would earn a total of  725.00  from holding Nordea North American or generate 1.51% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Nordea North American  vs.  Nordea Norge Verdi

Nordea North American

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nordea North American are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. Despite nearly stable technical and fundamental indicators, Nordea North is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Nordea Norge Verdi

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nordea Norge Verdi has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong basic indicators, Nordea Norge is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Nordea North and Nordea Norge

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

The idea behind Nordea North American and Nordea Norge Verdi 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.