Correlation Between Nordea 1 and Dow Jones
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By analyzing existing cross correlation between Nordea 1 and Dow Jones Industrial, you can compare the effects of market volatilities on Nordea 1 and Dow Jones 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 Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordea 1 and Dow Jones.
Diversification Opportunities for Nordea 1 and Dow Jones
Very weak diversification
The 3 months correlation between Nordea and Dow is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Nordea 1 and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial 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 Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Nordea 1 i.e., Nordea 1 and Dow Jones go up and down completely randomly.
Pair Corralation between Nordea 1 and Dow Jones
Assuming the 90 days trading horizon Nordea 1 is expected to under-perform the Dow Jones. But the fund apears to be less risky and, when comparing its historical volatility, Nordea 1 is 1.51 times less risky than Dow Jones. The fund trades about -0.15 of its potential returns per unit of risk. The Dow Jones Industrial is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 4,223,305 in Dow Jones Industrial on August 30, 2024 and sell it today you would earn a total of 248,901 from holding Dow Jones Industrial or generate 5.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nordea 1 vs. Dow Jones Industrial
Performance |
| Timeline |
Nordea 1 and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Nordea 1
Pair trading matchups for Nordea 1
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Nordea 1 and Dow Jones
The main advantage of trading using opposite Nordea 1 and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordea 1 position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Nordea 1 vs. Franklin Floating Rate | Nordea 1 vs. Franklin Floating Rate | Nordea 1 vs. Franklin Floating Rate | Nordea 1 vs. Dalata Hotel Group |
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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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