Correlation Between First Hawaiian and Nordea Bank
Can any of the company-specific risk be diversified away by investing in both First Hawaiian 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 First Hawaiian and Nordea Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Hawaiian and Nordea Bank Abp, you can compare the effects of market volatilities on First Hawaiian 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 First Hawaiian with a short position of Nordea Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Hawaiian and Nordea Bank.
Diversification Opportunities for First Hawaiian and Nordea Bank
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between First and Nordea is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding First Hawaiian 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 First Hawaiian 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 First Hawaiian 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 First Hawaiian i.e., First Hawaiian and Nordea Bank go up and down completely randomly.
Pair Corralation between First Hawaiian and Nordea Bank
Considering the 90-day investment horizon First Hawaiian is expected to generate 2.61 times more return on investment than Nordea Bank. However, First Hawaiian is 2.61 times more volatile than Nordea Bank Abp. It trades about 0.18 of its potential returns per unit of risk. Nordea Bank Abp is currently generating about -0.29 per unit of risk. If you would invest 2,479 in First Hawaiian on September 4, 2024 and sell it today you would earn a total of 261.00 from holding First Hawaiian or generate 10.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
First Hawaiian vs. Nordea Bank Abp
Performance |
| Timeline |
| First Hawaiian |
| Nordea Bank Abp |
First Hawaiian and Nordea Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Hawaiian and Nordea Bank
The main advantage of trading using opposite First Hawaiian and Nordea Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Hawaiian 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.| First Hawaiian vs. Territorial Bancorp | First Hawaiian vs. Bank of Hawaii | First Hawaiian vs. Financial Institutions | First Hawaiian vs. Heritage Financial |
| Nordea Bank vs. United Overseas Bank | Nordea Bank vs. KBC Groep NV | Nordea Bank vs. Bank Mandiri Persero | Nordea Bank vs. Overseas Chinese Banking |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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