Correlation Between MTI Wireless and Nordea Bank
Can any of the company-specific risk be diversified away by investing in both MTI Wireless 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 MTI Wireless and Nordea Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MTI Wireless Edge and Nordea Bank Abp, you can compare the effects of market volatilities on MTI Wireless 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 MTI Wireless with a short position of Nordea Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of MTI Wireless and Nordea Bank.
Diversification Opportunities for MTI Wireless and Nordea Bank
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between MTI and Nordea is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding MTI Wireless Edge 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 MTI Wireless 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 MTI Wireless Edge 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 MTI Wireless i.e., MTI Wireless and Nordea Bank go up and down completely randomly.
Pair Corralation between MTI Wireless and Nordea Bank
Assuming the 90 days trading horizon MTI Wireless Edge is expected to generate 1.58 times more return on investment than Nordea Bank. However, MTI Wireless is 1.58 times more volatile than Nordea Bank Abp. It trades about 0.33 of its potential returns per unit of risk. Nordea Bank Abp is currently generating about 0.13 per unit of risk. If you would invest 4,450 in MTI Wireless Edge on October 12, 2024 and sell it today you would earn a total of 500.00 from holding MTI Wireless Edge or generate 11.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MTI Wireless Edge vs. Nordea Bank Abp
Performance |
| Timeline |
| MTI Wireless Edge |
| Nordea Bank Abp |
MTI Wireless and Nordea Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MTI Wireless and Nordea Bank
The main advantage of trading using opposite MTI Wireless and Nordea Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MTI Wireless 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.| MTI Wireless vs. Lords Grp Trading | MTI Wireless vs. Bloomsbury Publishing Plc | MTI Wireless vs. Herald Investment Trust | MTI Wireless vs. Bankers Investment Trust |
| Nordea Bank vs. MTI Wireless Edge | Nordea Bank vs. Mineral Financial Investments | Nordea Bank vs. Infrastrutture Wireless Italiane | Nordea Bank vs. EJF Investments |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |