Correlation Between Nordnet Teknologi and Nordea 1

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

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

Diversification Opportunities for Nordnet Teknologi and Nordea 1

0.91

Correlation Coefficient

Nordnet Teknologi  Nordea 1

Almost no diversification

The 3 months correlation between Nordnet and Nordea is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Nordnet Teknologi Indeks and Nordea 1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nordea 1 and Nordnet Teknologi 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 Nordnet Teknologi Indeks are associated (or correlated) with Nordea 1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nordea 1 has no effect on the direction of Nordnet Teknologi i.e., Nordnet Teknologi and Nordea 1 go up and down completely randomly.

Pair Corralation between Nordnet Teknologi and Nordea 1

Assuming the 90 days trading horizon Nordnet Teknologi Indeks is expected to under-perform the Nordea 1. In addition to that, Nordnet Teknologi is 1.76 times more volatile than Nordea 1 . It trades about -0.17 of its total potential returns per unit of risk. Nordea 1 is currently generating about -0.14 per unit of volatility. If you would invest  40,292  in Nordea 1 on December 27, 2024 and sell it today you would lose (3,348) from holding Nordea 1 or give up 8.31% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.41%
Values	Daily Returns

Nordnet Teknologi Indeks  vs.  Nordea 1

Nordnet Teknologi Indeks

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nordnet Teknologi Indeks has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's primary indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the fund investors.

Nordea 1

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nordea 1 has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest inconsistent performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Nordnet Teknologi and Nordea 1

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

The idea behind Nordnet Teknologi Indeks and Nordea 1 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.