Correlation Between AP Mller and Nordea Bank
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By analyzing existing cross correlation between AP Mller and Nordea Bank Abp, you can compare the effects of market volatilities on AP Mller 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 AP Mller with a short position of Nordea Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of AP Mller and Nordea Bank.
Diversification Opportunities for AP Mller and Nordea Bank
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between MAERSK-A and Nordea is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding AP Mller 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 AP Mller 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 AP Mller 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 AP Mller i.e., AP Mller and Nordea Bank go up and down completely randomly.
Pair Corralation between AP Mller and Nordea Bank
Assuming the 90 days trading horizon AP Mller is expected to generate 2.79 times more return on investment than Nordea Bank. However, AP Mller is 2.79 times more volatile than Nordea Bank Abp. It trades about 0.17 of its potential returns per unit of risk. Nordea Bank Abp is currently generating about -0.12 per unit of risk. If you would invest 1,004,000 in AP Mller on August 28, 2024 and sell it today you would earn a total of 119,000 from holding AP Mller or generate 11.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
AP Mller vs. Nordea Bank Abp
Performance |
| Timeline |
| AP Mller |
| Nordea Bank Abp |
AP Mller and Nordea Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AP Mller and Nordea Bank
The main advantage of trading using opposite AP Mller and Nordea Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AP Mller 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.| AP Mller vs. AP Mller | AP Mller vs. DSV Panalpina AS | AP Mller vs. Danske Bank AS | AP Mller vs. FLSmidth Co |
| Nordea Bank vs. Jyske Bank AS | Nordea Bank vs. Tryg AS | Nordea Bank vs. Danske Bank AS | Nordea Bank vs. ISS AS |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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