Correlation Between Nordea 1 and Nordea Stabile

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

By analyzing existing cross correlation between Nordea 1 and Nordea Stabile Aksjer, you can compare the effects of market volatilities on Nordea 1 and Nordea Stabile 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 Nordea Stabile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordea 1 and Nordea Stabile.

Diversification Opportunities for Nordea 1 and Nordea Stabile

0.0

Correlation Coefficient

Nordea 1  Nordea Stabile

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

Pair Corralation between Nordea 1 and Nordea Stabile

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

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

Nordea 1   vs.  Nordea Stabile Aksjer

Nordea 1

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Nordea 1 are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat 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.

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.

Pair Trading with Nordea 1 and Nordea Stabile

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

The idea behind Nordea 1 and Nordea Stabile Aksjer 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.