Correlation Between Dow Jones and Nordea Norwegian
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By analyzing existing cross correlation between Dow Jones Industrial and Nordea Norwegian Stars, you can compare the effects of market volatilities on Dow Jones and Nordea Norwegian 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 Norwegian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Nordea Norwegian.
Diversification Opportunities for Dow Jones and Nordea Norwegian
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dow and Nordea is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Nordea Norwegian Stars in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nordea Norwegian Stars 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 Norwegian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nordea Norwegian Stars has no effect on the direction of Dow Jones i.e., Dow Jones and Nordea Norwegian go up and down completely randomly.
Pair Corralation between Dow Jones and Nordea Norwegian
Assuming the 90 days trading horizon Dow Jones Industrial is expected to under-perform the Nordea Norwegian. But the index apears to be less risky and, when comparing its historical volatility, Dow Jones Industrial is 1.0 times less risky than Nordea Norwegian. The index trades about -0.19 of its potential returns per unit of risk. The Nordea Norwegian Stars is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 17,360 in Nordea Norwegian Stars on November 28, 2024 and sell it today you would earn a total of 11.00 from holding Nordea Norwegian Stars or generate 0.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dow Jones Industrial vs. Nordea Norwegian Stars
Performance |
| Timeline |
Dow Jones and Nordea Norwegian Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Nordea Norwegian Stars
Pair trading matchups for Nordea Norwegian
Pair Trading with Dow Jones and Nordea Norwegian
The main advantage of trading using opposite Dow Jones and Nordea Norwegian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Nordea Norwegian 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 Norwegian will offset losses from the drop in Nordea Norwegian's long position.| Dow Jones vs. Gladstone Investment | Dow Jones vs. BW Offshore Limited | Dow Jones vs. Fidus Investment Corp | Dow Jones vs. Aperture Health |
| Nordea Norwegian vs. Nordea 1 | Nordea Norwegian vs. Nordea North American | Nordea Norwegian vs. Nordea 1 | Nordea Norwegian vs. Nordea 1 |
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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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