Correlation Between Arion Banki and Nordea Bank
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By analyzing existing cross correlation between Arion banki hf and Nordea Bank Abp, you can compare the effects of market volatilities on Arion Banki 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 Arion Banki with a short position of Nordea Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arion Banki and Nordea Bank.
Diversification Opportunities for Arion Banki and Nordea Bank
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Arion and Nordea is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Arion banki hf 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 Arion Banki 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 Arion banki hf 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 Arion Banki i.e., Arion Banki and Nordea Bank go up and down completely randomly.
Pair Corralation between Arion Banki and Nordea Bank
Assuming the 90 days trading horizon Arion banki hf is expected to generate 2.09 times more return on investment than Nordea Bank. However, Arion Banki is 2.09 times more volatile than Nordea Bank Abp. It trades about -0.01 of its potential returns per unit of risk. Nordea Bank Abp is currently generating about -0.04 per unit of risk. If you would invest 1,210 in Arion banki hf on August 24, 2024 and sell it today you would lose (10.00) from holding Arion banki hf or give up 0.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Arion banki hf vs. Nordea Bank Abp
Performance |
| Timeline |
| Arion banki hf |
| Nordea Bank Abp |
Arion Banki and Nordea Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arion Banki and Nordea Bank
The main advantage of trading using opposite Arion Banki and Nordea Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arion Banki 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.| Arion Banki vs. Nordea Bank Abp | Arion Banki vs. Skandinaviska Enskilda Banken | Arion Banki vs. Skandinaviska Enskilda Banken | Arion Banki vs. Swedbank AB |
| Nordea Bank vs. Skandinaviska Enskilda Banken | Nordea Bank vs. Skandinaviska Enskilda Banken | Nordea Bank vs. Swedbank AB | Nordea Bank vs. Arion banki hf |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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