Correlation Between Nordea Bank and Xeros Technology
Can any of the company-specific risk be diversified away by investing in both Nordea Bank and Xeros Technology 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 Xeros Technology 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 Xeros Technology Group, you can compare the effects of market volatilities on Nordea Bank and Xeros Technology 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 Xeros Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordea Bank and Xeros Technology.
Diversification Opportunities for Nordea Bank and Xeros Technology
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Nordea and Xeros is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Nordea Bank Abp and Xeros Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xeros Technology 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 Xeros Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xeros Technology has no effect on the direction of Nordea Bank i.e., Nordea Bank and Xeros Technology go up and down completely randomly.
Pair Corralation between Nordea Bank and Xeros Technology
Assuming the 90 days trading horizon Nordea Bank is expected to generate 6.68 times less return on investment than Xeros Technology. But when comparing it to its historical volatility, Nordea Bank Abp is 4.0 times less risky than Xeros Technology. It trades about 0.03 of its potential returns per unit of risk. Xeros Technology Group is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 48.00 in Xeros Technology Group on November 6, 2024 and sell it today you would earn a total of 5.00 from holding Xeros Technology Group or generate 10.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nordea Bank Abp vs. Xeros Technology Group
Performance |
| Timeline |
| Nordea Bank Abp |
| Xeros Technology |
Nordea Bank and Xeros Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordea Bank and Xeros Technology
The main advantage of trading using opposite Nordea Bank and Xeros Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordea Bank position performs unexpectedly, Xeros Technology 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 Xeros Technology will offset losses from the drop in Xeros Technology's long position.| Nordea Bank vs. Take Two Interactive Software | Nordea Bank vs. Bigblu Broadband PLC | Nordea Bank vs. Accesso Technology Group | Nordea Bank vs. Impax Asset Management |
| Xeros Technology vs. Pets at Home | Xeros Technology vs. Lindsell Train Investment | Xeros Technology vs. Beazer Homes USA | Xeros Technology vs. Roadside Real Estate |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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