Correlation Between Dow Jones and Nordea Bank
Can any of the company-specific risk be diversified away by investing in both Dow Jones 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 Dow Jones and Nordea Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dow Jones Industrial and Nordea Bank Abp, you can compare the effects of market volatilities on Dow Jones 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 Dow Jones with a short position of Nordea Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Nordea Bank.
Diversification Opportunities for Dow Jones and Nordea Bank
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Dow and Nordea is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial 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 Dow Jones 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 Dow Jones Industrial 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 Dow Jones i.e., Dow Jones and Nordea Bank go up and down completely randomly.
Pair Corralation between Dow Jones and Nordea Bank
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.58 times more return on investment than Nordea Bank. However, Dow Jones Industrial is 1.72 times less risky than Nordea Bank. It trades about 0.08 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 3,389,102 in Dow Jones Industrial on October 26, 2024 and sell it today you would earn a total of 1,053,323 from holding Dow Jones Industrial or generate 31.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.2% |
| Values | Daily Returns |
Dow Jones Industrial vs. Nordea Bank Abp
Performance |
| Timeline |
Dow Jones and Nordea Bank Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Nordea Bank Abp
Pair trading matchups for Nordea Bank
Pair Trading with Dow Jones and Nordea Bank
The main advantage of trading using opposite Dow Jones and Nordea Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones 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.| Dow Jones vs. Asure Software | Dow Jones vs. Amkor Technology | Dow Jones vs. Radcom | Dow Jones vs. Senmiao Technology |
| Nordea Bank vs. Orient Telecoms | Nordea Bank vs. Foresight Environmental Infrastructure | Nordea Bank vs. JLEN Environmental Assets | Nordea Bank vs. Charter Communications Cl |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
Other Complementary Tools
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |