Correlation Between Nordea 1 and KLP AksjeGlobal

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Can any of the company-specific risk be diversified away by investing in both Nordea 1 and KLP AksjeGlobal 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 1 and KLP AksjeGlobal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nordea 1 and KLP AksjeGlobal Flerfaktor, you can compare the effects of market volatilities on Nordea 1 and KLP AksjeGlobal 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 KLP AksjeGlobal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordea 1 and KLP AksjeGlobal.

Diversification Opportunities for Nordea 1 and KLP AksjeGlobal

0.44
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Nordea and KLP is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Nordea 1 and KLP AksjeGlobal Flerfaktor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KLP AksjeGlobal Fler 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 KLP AksjeGlobal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KLP AksjeGlobal Fler has no effect on the direction of Nordea 1 i.e., Nordea 1 and KLP AksjeGlobal go up and down completely randomly.

Pair Corralation between Nordea 1 and KLP AksjeGlobal

Assuming the 90 days trading horizon Nordea 1 is expected to under-perform the KLP AksjeGlobal. In addition to that, Nordea 1 is 1.09 times more volatile than KLP AksjeGlobal Flerfaktor. It trades about -0.04 of its total potential returns per unit of risk. KLP AksjeGlobal Flerfaktor is currently generating about 0.09 per unit of volatility. If you would invest  239,679  in KLP AksjeGlobal Flerfaktor on November 28, 2024 and sell it today you would earn a total of  2,053  from holding KLP AksjeGlobal Flerfaktor or generate 0.86% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy95.45%
ValuesDaily Returns

Nordea 1   vs.  KLP AksjeGlobal Flerfaktor

 Performance 
       Timeline  
Nordea 1 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Nordea 1 has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Nordea 1 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
KLP AksjeGlobal Fler 

Risk-Adjusted Performance

Insignificant

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in KLP AksjeGlobal Flerfaktor are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat strong basic indicators, KLP AksjeGlobal is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Nordea 1 and KLP AksjeGlobal Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Nordea 1 and KLP AksjeGlobal

The main advantage of trading using opposite Nordea 1 and KLP AksjeGlobal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordea 1 position performs unexpectedly, KLP AksjeGlobal 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 KLP AksjeGlobal will offset losses from the drop in KLP AksjeGlobal's long position.
Nordea 1 vs. Franklin Floating Rate
Nordea 1 vs. Franklin Floating Rate
Nordea 1 vs. Franklin Floating Rate
Nordea 1 vs. KLP Aksje Fremvoksende
The idea behind Nordea 1 and KLP AksjeGlobal Flerfaktor pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
KLP AksjeGlobal vs. Franklin Floating Rate
KLP AksjeGlobal vs. Franklin Floating Rate
KLP AksjeGlobal vs. Franklin Floating Rate
KLP AksjeGlobal vs. KLP Aksje Fremvoksende
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.

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