Correlation Between 1895 Of and Nordea Bank

Can any of the company-specific risk be diversified away by investing in both 1895 Of and Nordea Bank 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 1895 Of and Nordea Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between 1895 of Wisconsin and Nordea Bank Abp, you can compare the effects of market volatilities on 1895 Of and Nordea Bank 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 1895 Of with a short position of Nordea Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of 1895 Of and Nordea Bank.

Diversification Opportunities for 1895 Of and Nordea Bank

-0.28

Correlation Coefficient

1895 Of  Nordea Bank

Very good diversification

The 3 months correlation between 1895 and Nordea is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding 1895 of Wisconsin and Nordea Bank Abp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nordea Bank Abp and 1895 Of 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 1895 of Wisconsin are associated (or correlated) with Nordea Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nordea Bank Abp has no effect on the direction of 1895 Of i.e., 1895 Of and Nordea Bank go up and down completely randomly.

Pair Corralation between 1895 Of and Nordea Bank

Given the investment horizon of 90 days 1895 of Wisconsin is expected to generate 0.4 times more return on investment than Nordea Bank. However, 1895 of Wisconsin is 2.53 times less risky than Nordea Bank. It trades about 0.1 of its potential returns per unit of risk. Nordea Bank Abp is currently generating about -0.11 per unit of risk. If you would invest  990.00  in 1895 of Wisconsin on September 20, 2024 and sell it today you would earn a total of  9.00  from holding 1895 of Wisconsin or generate 0.91% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

1895 of Wisconsin  vs.  Nordea Bank Abp

1895 of Wisconsin

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in 1895 of Wisconsin are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, 1895 Of may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Nordea Bank Abp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nordea Bank Abp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's fundamental drivers remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with 1895 Of and Nordea Bank

The main advantage of trading using opposite 1895 Of and Nordea Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 1895 Of position performs unexpectedly, Nordea Bank 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 Bank will offset losses from the drop in Nordea Bank's long position.

The idea behind 1895 of Wisconsin and Nordea Bank Abp 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.