Correlation Between Nordea Bank and Zoom Video
Can any of the company-specific risk be diversified away by investing in both Nordea Bank and Zoom Video 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 Zoom Video 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 Zoom Video Communications, you can compare the effects of market volatilities on Nordea Bank and Zoom Video 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 Zoom Video. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordea Bank and Zoom Video.
Diversification Opportunities for Nordea Bank and Zoom Video
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nordea and Zoom is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Nordea Bank Abp and Zoom Video Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zoom Video Communications 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 Zoom Video. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zoom Video Communications has no effect on the direction of Nordea Bank i.e., Nordea Bank and Zoom Video go up and down completely randomly.
Pair Corralation between Nordea Bank and Zoom Video
Assuming the 90 days trading horizon Nordea Bank Abp is expected to generate 0.87 times more return on investment than Zoom Video. However, Nordea Bank Abp is 1.15 times less risky than Zoom Video. It trades about 0.57 of its potential returns per unit of risk. Zoom Video Communications is currently generating about -0.17 per unit of risk. If you would invest 11,880 in Nordea Bank Abp on October 28, 2024 and sell it today you would earn a total of 1,427 from holding Nordea Bank Abp or generate 12.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nordea Bank Abp vs. Zoom Video Communications
Performance |
| Timeline |
| Nordea Bank Abp |
| Zoom Video Communications |
Nordea Bank and Zoom Video Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordea Bank and Zoom Video
The main advantage of trading using opposite Nordea Bank and Zoom Video positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordea Bank position performs unexpectedly, Zoom Video 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 Zoom Video will offset losses from the drop in Zoom Video's long position.| Nordea Bank vs. Xeros Technology Group | Nordea Bank vs. SMA Solar Technology | Nordea Bank vs. DXC Technology Co | Nordea Bank vs. Air Products Chemicals |
| Zoom Video vs. Enbridge | Zoom Video vs. Endo International PLC | Zoom Video vs. Gaming Realms plc | Zoom Video vs. Erste Group Bank |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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