Correlation Between NEL ASA and BankUnited
Can any of the company-specific risk be diversified away by investing in both NEL ASA and BankUnited 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 NEL ASA and BankUnited into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NEL ASA ADR30 and BankUnited, you can compare the effects of market volatilities on NEL ASA and BankUnited 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 NEL ASA with a short position of BankUnited. Check out your portfolio center. Please also check ongoing floating volatility patterns of NEL ASA and BankUnited.
Diversification Opportunities for NEL ASA and BankUnited
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NEL and BankUnited is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding NEL ASA ADR30 and BankUnited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BankUnited and NEL ASA 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 NEL ASA ADR30 are associated (or correlated) with BankUnited. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BankUnited has no effect on the direction of NEL ASA i.e., NEL ASA and BankUnited go up and down completely randomly.
Pair Corralation between NEL ASA and BankUnited
Assuming the 90 days trading horizon NEL ASA ADR30 is expected to under-perform the BankUnited. In addition to that, NEL ASA is 1.83 times more volatile than BankUnited. It trades about -0.24 of its total potential returns per unit of risk. BankUnited is currently generating about 0.23 per unit of volatility. If you would invest 3,200 in BankUnited on August 26, 2024 and sell it today you would earn a total of 680.00 from holding BankUnited or generate 21.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NEL ASA ADR30 vs. BankUnited
Performance |
| Timeline |
| NEL ASA ADR30 |
| BankUnited |
NEL ASA and BankUnited Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NEL ASA and BankUnited
The main advantage of trading using opposite NEL ASA and BankUnited positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NEL ASA position performs unexpectedly, BankUnited 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 BankUnited will offset losses from the drop in BankUnited's long position.| NEL ASA vs. Superior Plus Corp | NEL ASA vs. NMI Holdings | NEL ASA vs. Origin Agritech | NEL ASA vs. SIVERS SEMICONDUCTORS AB |
| BankUnited vs. Superior Plus Corp | BankUnited vs. NMI Holdings | BankUnited vs. Origin Agritech | BankUnited vs. SIVERS SEMICONDUCTORS 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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