Correlation Between Nordfyns Bank and Maj Invest

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

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

Diversification Opportunities for Nordfyns Bank and Maj Invest

-0.18

Correlation Coefficient

Nordfyns Bank  Maj Invest

Good diversification

The 3 months correlation between Nordfyns and Maj is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Nordfyns Bank AS and Maj Invest Glob in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maj Invest Glob and Nordfyns 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 Nordfyns Bank AS are associated (or correlated) with Maj Invest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maj Invest Glob has no effect on the direction of Nordfyns Bank i.e., Nordfyns Bank and Maj Invest go up and down completely randomly.

Pair Corralation between Nordfyns Bank and Maj Invest

Assuming the 90 days trading horizon Nordfyns Bank AS is expected to generate 0.57 times more return on investment than Maj Invest. However, Nordfyns Bank AS is 1.75 times less risky than Maj Invest. It trades about 0.0 of its potential returns per unit of risk. Maj Invest Glob is currently generating about -0.15 per unit of risk. If you would invest  34,200  in Nordfyns Bank AS on December 23, 2024 and sell it today you would earn a total of  0.00  from holding Nordfyns Bank AS or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	90.16%
Values	Daily Returns

Nordfyns Bank AS  vs.  Maj Invest Glob

Nordfyns Bank AS

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nordfyns Bank AS has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

Maj Invest Glob

Risk-Adjusted Performance

Very Weak

Over the last 90 days Maj Invest Glob has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Nordfyns Bank and Maj Invest

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

The idea behind Nordfyns Bank AS and Maj Invest Glob 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.

Check out your portfolio center.

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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.