Correlation Between Invisio Communications and Nordea Bank
Can any of the company-specific risk be diversified away by investing in both Invisio Communications 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 Invisio Communications and Nordea Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invisio Communications AB and Nordea Bank Abp, you can compare the effects of market volatilities on Invisio Communications 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 Invisio Communications with a short position of Nordea Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invisio Communications and Nordea Bank.
Diversification Opportunities for Invisio Communications and Nordea Bank
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Invisio and Nordea is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Invisio Communications AB 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 Invisio Communications 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 Invisio Communications AB 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 Invisio Communications i.e., Invisio Communications and Nordea Bank go up and down completely randomly.
Pair Corralation between Invisio Communications and Nordea Bank
Assuming the 90 days trading horizon Invisio Communications AB is expected to generate 3.33 times more return on investment than Nordea Bank. However, Invisio Communications is 3.33 times more volatile than Nordea Bank Abp. It trades about 0.29 of its potential returns per unit of risk. Nordea Bank Abp is currently generating about 0.34 per unit of risk. If you would invest 26,750 in Invisio Communications AB on November 3, 2024 and sell it today you would earn a total of 6,250 from holding Invisio Communications AB or generate 23.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invisio Communications AB vs. Nordea Bank Abp
Performance |
| Timeline |
| Invisio Communications |
| Nordea Bank Abp |
Invisio Communications and Nordea Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invisio Communications and Nordea Bank
The main advantage of trading using opposite Invisio Communications and Nordea Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invisio Communications 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.| Invisio Communications vs. Hexatronic Group AB | Invisio Communications vs. CellaVision AB | Invisio Communications vs. Xvivo Perfusion AB | Invisio Communications vs. Sectra AB |
| Nordea Bank vs. TF Bank AB | Nordea Bank vs. Catena Media plc | Nordea Bank vs. Arion banki hf | Nordea Bank vs. Investment AB Oresund |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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