Correlation Between EEducation Albert and Nordea Bank
Can any of the company-specific risk be diversified away by investing in both EEducation Albert 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 EEducation Albert and Nordea Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between eEducation Albert AB and Nordea Bank Abp, you can compare the effects of market volatilities on EEducation Albert 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 EEducation Albert with a short position of Nordea Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of EEducation Albert and Nordea Bank.
Diversification Opportunities for EEducation Albert and Nordea Bank
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between EEducation and Nordea is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding eEducation Albert AB 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 EEducation Albert 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 eEducation Albert AB 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 EEducation Albert i.e., EEducation Albert and Nordea Bank go up and down completely randomly.
Pair Corralation between EEducation Albert and Nordea Bank
Assuming the 90 days trading horizon eEducation Albert AB is expected to under-perform the Nordea Bank. In addition to that, EEducation Albert is 2.5 times more volatile than Nordea Bank Abp. It trades about -0.06 of its total potential returns per unit of risk. Nordea Bank Abp is currently generating about 0.05 per unit of volatility. If you would invest 10,756 in Nordea Bank Abp on August 26, 2024 and sell it today you would earn a total of 1,474 from holding Nordea Bank Abp or generate 13.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
eEducation Albert AB vs. Nordea Bank Abp
Performance |
| Timeline |
| eEducation Albert |
| Nordea Bank Abp |
EEducation Albert and Nordea Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EEducation Albert and Nordea Bank
The main advantage of trading using opposite EEducation Albert and Nordea Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EEducation Albert 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.| EEducation Albert vs. Sinch AB | EEducation Albert vs. Hexatronic Group AB | EEducation Albert vs. Samhllsbyggnadsbolaget i Norden | EEducation Albert vs. Storskogen Group AB |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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