Correlation Between Nordea Invest and Othania Invest

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

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

Diversification Opportunities for Nordea Invest and Othania Invest

0.67

Correlation Coefficient

Nordea Invest  Othania Invest

Poor diversification

The 3 months correlation between Nordea and Othania is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Nordea Invest Global and Othania Invest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Othania Invest and Nordea Invest 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 Invest Global are associated (or correlated) with Othania Invest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Othania Invest has no effect on the direction of Nordea Invest i.e., Nordea Invest and Othania Invest go up and down completely randomly.

Pair Corralation between Nordea Invest and Othania Invest

Assuming the 90 days trading horizon Nordea Invest Global is expected to generate 1.27 times more return on investment than Othania Invest. However, Nordea Invest is 1.27 times more volatile than Othania Invest. It trades about 0.07 of its potential returns per unit of risk. Othania Invest is currently generating about 0.04 per unit of risk. If you would invest  4,338  in Nordea Invest Global on October 26, 2024 and sell it today you would earn a total of  170.00  from holding Nordea Invest Global or generate 3.92% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	94.74%
Values	Daily Returns

Nordea Invest Global  vs.  Othania Invest

Nordea Invest Global

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Nordea Invest Global are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent fundamental indicators, Nordea Invest is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Othania Invest

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Othania Invest are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of rather sound fundamental indicators, Othania Invest is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Nordea Invest and Othania Invest

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

The idea behind Nordea Invest Global and Othania Invest 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 CEOs Directory module to screen CEOs from public companies around the world.