Correlation Between Nnit AS and Nordfyns Bank

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

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

Diversification Opportunities for Nnit AS and Nordfyns Bank

-0.22

Correlation Coefficient

Nnit AS  Nordfyns Bank

Very good diversification

The 3 months correlation between Nnit and Nordfyns is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Nnit AS and Nordfyns Bank AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nordfyns Bank AS and Nnit AS 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 Nnit AS are associated (or correlated) with Nordfyns Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nordfyns Bank AS has no effect on the direction of Nnit AS i.e., Nnit AS and Nordfyns Bank go up and down completely randomly.

Pair Corralation between Nnit AS and Nordfyns Bank

Assuming the 90 days trading horizon Nnit AS is expected to under-perform the Nordfyns Bank. In addition to that, Nnit AS is 1.83 times more volatile than Nordfyns Bank AS. It trades about -0.19 of its total potential returns per unit of risk. Nordfyns Bank AS is currently generating about 0.01 per unit of volatility. If you would invest  33,800  in Nordfyns Bank AS on December 30, 2024 and sell it today you would earn a total of  200.00  from holding Nordfyns Bank AS or generate 0.59% return on investment over 90 days.

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

Nnit AS  vs.  Nordfyns Bank AS

Nnit AS

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nnit AS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic 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 firm investors.

Nordfyns Bank AS

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Nordfyns Bank AS are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Nordfyns Bank is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Nnit AS and Nordfyns Bank

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

The idea behind Nnit AS and Nordfyns Bank 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.