Correlation Between Nordea Bank and Teradata Corp
Can any of the company-specific risk be diversified away by investing in both Nordea Bank and Teradata Corp 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 Teradata Corp 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 Teradata Corp, you can compare the effects of market volatilities on Nordea Bank and Teradata Corp 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 Teradata Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordea Bank and Teradata Corp.
Diversification Opportunities for Nordea Bank and Teradata Corp
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Nordea and Teradata is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Nordea Bank Abp and Teradata Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teradata Corp 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 Teradata Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Teradata Corp has no effect on the direction of Nordea Bank i.e., Nordea Bank and Teradata Corp go up and down completely randomly.
Pair Corralation between Nordea Bank and Teradata Corp
Assuming the 90 days trading horizon Nordea Bank Abp is expected to generate 0.96 times more return on investment than Teradata Corp. However, Nordea Bank Abp is 1.04 times less risky than Teradata Corp. It trades about 0.09 of its potential returns per unit of risk. Teradata Corp is currently generating about -0.23 per unit of risk. If you would invest 12,450 in Nordea Bank Abp on October 11, 2024 and sell it today you would earn a total of 230.00 from holding Nordea Bank Abp or generate 1.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Nordea Bank Abp vs. Teradata Corp
Performance |
| Timeline |
| Nordea Bank Abp |
| Teradata Corp |
Nordea Bank and Teradata Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordea Bank and Teradata Corp
The main advantage of trading using opposite Nordea Bank and Teradata Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordea Bank position performs unexpectedly, Teradata Corp 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 Teradata Corp will offset losses from the drop in Teradata Corp's long position.| Nordea Bank vs. Intermediate Capital Group | Nordea Bank vs. Zoom Video Communications | Nordea Bank vs. One Media iP | Nordea Bank vs. Zinc Media Group |
| Teradata Corp vs. Hochschild Mining plc | Teradata Corp vs. Prudential Financial | Teradata Corp vs. Ecclesiastical Insurance Office | Teradata Corp vs. MG Credit Income |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |