Correlation Between Nordea 1 and INVESCO 2

Can any of the company-specific risk be diversified away by investing in both Nordea 1 and INVESCO 2 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 1 and INVESCO 2 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Nordea 1 and INVESCO 2 BOND, you can compare the effects of market volatilities on Nordea 1 and INVESCO 2 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 1 with a short position of INVESCO 2. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordea 1 and INVESCO 2.

Diversification Opportunities for Nordea 1 and INVESCO 2

0.0

Correlation Coefficient

Nordea 1  INVESCO 2

Pay attention - limited upside

The 3 months correlation between Nordea and INVESCO is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Nordea 1 and INVESCO 2 BOND in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INVESCO 2 BOND and Nordea 1 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 1 are associated (or correlated) with INVESCO 2. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INVESCO 2 BOND has no effect on the direction of Nordea 1 i.e., Nordea 1 and INVESCO 2 go up and down completely randomly.

Pair Corralation between Nordea 1 and INVESCO 2

If you would invest  39,421  in Nordea 1 on September 16, 2024 and sell it today you would earn a total of  949.00  from holding Nordea 1 or generate 2.41% return on investment over 90 days.

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

Nordea 1   vs.  INVESCO 2 BOND

Nordea 1

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nordea 1 are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Nordea 1 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

INVESCO 2 BOND

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days INVESCO 2 BOND has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong basic indicators, INVESCO 2 is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Nordea 1 and INVESCO 2

The main advantage of trading using opposite Nordea 1 and INVESCO 2 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordea 1 position performs unexpectedly, INVESCO 2 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 INVESCO 2 will offset losses from the drop in INVESCO 2's long position.

The idea behind Nordea 1 and INVESCO 2 BOND 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..