Correlation Between Nordea Norwegian and Nordea 1
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By analyzing existing cross correlation between Nordea Norwegian Stars and Nordea 1 , you can compare the effects of market volatilities on Nordea Norwegian and Nordea 1 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 Norwegian with a short position of Nordea 1. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordea Norwegian and Nordea 1.
Diversification Opportunities for Nordea Norwegian and Nordea 1
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Nordea and Nordea is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Nordea Norwegian Stars and Nordea 1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nordea 1 and Nordea Norwegian 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 Norwegian Stars are associated (or correlated) with Nordea 1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nordea 1 has no effect on the direction of Nordea Norwegian i.e., Nordea Norwegian and Nordea 1 go up and down completely randomly.
Pair Corralation between Nordea Norwegian and Nordea 1
Assuming the 90 days trading horizon Nordea Norwegian is expected to generate 58.61 times less return on investment than Nordea 1. But when comparing it to its historical volatility, Nordea Norwegian Stars is 1.76 times less risky than Nordea 1. It trades about 0.01 of its potential returns per unit of risk. Nordea 1 is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 235,644 in Nordea 1 on September 2, 2024 and sell it today you would earn a total of 7,658 from holding Nordea 1 or generate 3.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nordea Norwegian Stars vs. Nordea 1
Performance |
| Timeline |
| Nordea Norwegian Stars |
| Nordea 1 |
Nordea Norwegian and Nordea 1 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordea Norwegian and Nordea 1
The main advantage of trading using opposite Nordea Norwegian and Nordea 1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordea Norwegian position performs unexpectedly, Nordea 1 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 Nordea 1 will offset losses from the drop in Nordea 1's long position.| Nordea Norwegian vs. Franklin Floating Rate | Nordea Norwegian vs. Franklin Floating Rate | Nordea Norwegian vs. Franklin Floating Rate | Nordea Norwegian vs. Dalata Hotel Group |
| Nordea 1 vs. Nordea 1 | Nordea 1 vs. Nordea Norwegian Stars | Nordea 1 vs. Nordea North American | Nordea 1 vs. Nordea 1 |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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