Correlation Between Nordea Stabile and Nordea Kaukoit

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

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

Diversification Opportunities for Nordea Stabile and Nordea Kaukoit

0.0

Correlation Coefficient

Nordea Stabile  Nordea Kaukoit

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 Stabile Aksjer and Nordea Kaukoit K in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nordea Kaukoit K and Nordea Stabile 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 Stabile Aksjer are associated (or correlated) with Nordea Kaukoit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nordea Kaukoit K has no effect on the direction of Nordea Stabile i.e., Nordea Stabile and Nordea Kaukoit go up and down completely randomly.

Pair Corralation between Nordea Stabile and Nordea Kaukoit

If you would invest (100.00) in Nordea Kaukoit K on October 10, 2024 and sell it today you would earn a total of  100.00  from holding Nordea Kaukoit K or generate -100.0% return on investment over 90 days.

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

Nordea Stabile Aksjer  vs.  Nordea Kaukoit K

Nordea Stabile Aksjer

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nordea Stabile Aksjer has generated negative risk-adjusted returns adding no value to fund investors. Despite fairly strong basic indicators, Nordea Stabile is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Nordea Kaukoit K

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nordea Kaukoit K has generated negative risk-adjusted returns adding no value to fund investors. Despite nearly stable basic indicators, Nordea Kaukoit is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Nordea Stabile and Nordea Kaukoit

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

The idea behind Nordea Stabile Aksjer and Nordea Kaukoit K 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.