Correlation Between Nordea Bank and Agillic AS

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

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

Diversification Opportunities for Nordea Bank and Agillic AS

-0.39

Correlation Coefficient

Nordea Bank  Agillic AS

Very good diversification

The 3 months correlation between Nordea and Agillic is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Nordea Bank Abp and Agillic AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agillic AS and Nordea Bank 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 Bank Abp are associated (or correlated) with Agillic AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agillic AS has no effect on the direction of Nordea Bank i.e., Nordea Bank and Agillic AS go up and down completely randomly.

Pair Corralation between Nordea Bank and Agillic AS

Assuming the 90 days trading horizon Nordea Bank Abp is expected to generate 0.83 times more return on investment than Agillic AS. However, Nordea Bank Abp is 1.21 times less risky than Agillic AS. It trades about 0.03 of its potential returns per unit of risk. Agillic AS is currently generating about -0.08 per unit of risk. If you would invest  7,784  in Nordea Bank Abp on September 13, 2024 and sell it today you would earn a total of  122.00  from holding Nordea Bank Abp or generate 1.57% return on investment over 90 days.

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

Nordea Bank Abp  vs.  Agillic AS

Nordea Bank Abp

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Nordea Bank Abp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Nordea Bank is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Agillic AS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Agillic AS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Nordea Bank and Agillic AS

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

The idea behind Nordea Bank Abp and Agillic AS 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.