Correlation Between Administer Oyj and Nordea Bank
Can any of the company-specific risk be diversified away by investing in both Administer Oyj and Nordea Bank 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 Administer Oyj and Nordea Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Administer Oyj and Nordea Bank Abp, you can compare the effects of market volatilities on Administer Oyj and Nordea Bank 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 Administer Oyj with a short position of Nordea Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Administer Oyj and Nordea Bank.
Diversification Opportunities for Administer Oyj and Nordea Bank
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Administer and Nordea is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Administer Oyj and Nordea Bank Abp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nordea Bank Abp and Administer Oyj 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 Administer Oyj are associated (or correlated) with Nordea Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nordea Bank Abp has no effect on the direction of Administer Oyj i.e., Administer Oyj and Nordea Bank go up and down completely randomly.
Pair Corralation between Administer Oyj and Nordea Bank
Assuming the 90 days trading horizon Administer Oyj is expected to under-perform the Nordea Bank. In addition to that, Administer Oyj is 1.55 times more volatile than Nordea Bank Abp. It trades about -0.33 of its total potential returns per unit of risk. Nordea Bank Abp is currently generating about -0.14 per unit of volatility. If you would invest 1,093 in Nordea Bank Abp on August 30, 2024 and sell it today you would lose (36.00) from holding Nordea Bank Abp or give up 3.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 91.3% |
| Values | Daily Returns |
Administer Oyj vs. Nordea Bank Abp
Performance |
| Timeline |
| Administer Oyj |
| Nordea Bank Abp |
Administer Oyj and Nordea Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Administer Oyj and Nordea Bank
The main advantage of trading using opposite Administer Oyj and Nordea Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Administer Oyj position performs unexpectedly, Nordea Bank 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 Bank will offset losses from the drop in Nordea Bank's long position.| Administer Oyj vs. United Bankers Oyj | Administer Oyj vs. Alandsbanken Abp A | Administer Oyj vs. Trainers House Oyj | Administer Oyj vs. SSH Communications Security |
| Nordea Bank vs. Sampo Oyj A | Nordea Bank vs. Fortum Oyj | Nordea Bank vs. UPM Kymmene Oyj | Nordea Bank vs. Neste Oil Oyj |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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