Correlation Between Nightingale Health and Nordea Bank
Can any of the company-specific risk be diversified away by investing in both Nightingale Health 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 Nightingale Health and Nordea Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nightingale Health Oyj and Nordea Bank Abp, you can compare the effects of market volatilities on Nightingale Health 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 Nightingale Health with a short position of Nordea Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nightingale Health and Nordea Bank.
Diversification Opportunities for Nightingale Health and Nordea Bank
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Nightingale and Nordea is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Nightingale Health Oyj 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 Nightingale Health 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 Nightingale Health Oyj 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 Nightingale Health i.e., Nightingale Health and Nordea Bank go up and down completely randomly.
Pair Corralation between Nightingale Health and Nordea Bank
Assuming the 90 days trading horizon Nightingale Health Oyj is expected to generate 3.81 times more return on investment than Nordea Bank. However, Nightingale Health is 3.81 times more volatile than Nordea Bank Abp. It trades about 0.1 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 116.00 in Nightingale Health Oyj on August 26, 2024 and sell it today you would earn a total of 160.00 from holding Nightingale Health Oyj or generate 137.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nightingale Health Oyj vs. Nordea Bank Abp
Performance |
| Timeline |
| Nightingale Health Oyj |
| Nordea Bank Abp |
Nightingale Health and Nordea Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nightingale Health and Nordea Bank
The main advantage of trading using opposite Nightingale Health and Nordea Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nightingale Health 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.| Nightingale Health vs. Vaisala Oyj A | Nightingale Health vs. CapMan Oyj B | Nightingale Health vs. HKFoods Oyj A | Nightingale Health vs. KONE Oyj |
| Nordea Bank vs. Sampo Oyj A | Nordea Bank vs. Fortum Oyj | Nordea Bank vs. UPM Kymmene Oyj | Nordea Bank vs. Neste Oil Oyj |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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