Correlation Between Nordea 1 and Franklin Floating
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By analyzing existing cross correlation between Nordea 1 and Franklin Floating Rate, you can compare the effects of market volatilities on Nordea 1 and Franklin Floating 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 1 with a short position of Franklin Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordea 1 and Franklin Floating.
Diversification Opportunities for Nordea 1 and Franklin Floating
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Nordea and Franklin is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Nordea 1 and Franklin Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Floating Rate and Nordea 1 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 1 are associated (or correlated) with Franklin Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Floating Rate has no effect on the direction of Nordea 1 i.e., Nordea 1 and Franklin Floating go up and down completely randomly.
Pair Corralation between Nordea 1 and Franklin Floating
Assuming the 90 days trading horizon Nordea 1 is expected to generate 9.29 times more return on investment than Franklin Floating. However, Nordea 1 is 9.29 times more volatile than Franklin Floating Rate. It trades about 0.23 of its potential returns per unit of risk. Franklin Floating Rate is currently generating about 0.36 per unit of risk. If you would invest 39,076 in Nordea 1 on August 30, 2024 and sell it today you would earn a total of 1,757 from holding Nordea 1 or generate 4.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Nordea 1 vs. Franklin Floating Rate
Performance |
| Timeline |
| Nordea 1 |
| Franklin Floating Rate |
Nordea 1 and Franklin Floating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordea 1 and Franklin Floating
The main advantage of trading using opposite Nordea 1 and Franklin Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordea 1 position performs unexpectedly, Franklin Floating 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 Franklin Floating will offset losses from the drop in Franklin Floating's long position.| Nordea 1 vs. KLP AksjeNorge Indeks | Nordea 1 vs. Storebrand Global Solutions | Nordea 1 vs. Franklin Floating Rate | Nordea 1 vs. Nordnet One Forsiktig |
| Franklin Floating vs. KLP AksjeNorge Indeks | Franklin Floating vs. Storebrand Global Solutions | Franklin Floating vs. Nordea 1 | Franklin Floating vs. Nordnet One Forsiktig |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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