Correlation Between Nordic Asia and Swedbank
Can any of the company-specific risk be diversified away by investing in both Nordic Asia and Swedbank 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 Nordic Asia and Swedbank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nordic Asia Investment and Swedbank AB, you can compare the effects of market volatilities on Nordic Asia and Swedbank 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 Nordic Asia with a short position of Swedbank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordic Asia and Swedbank.
Diversification Opportunities for Nordic Asia and Swedbank
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Nordic and Swedbank is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Nordic Asia Investment and Swedbank AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swedbank AB and Nordic Asia 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 Nordic Asia Investment are associated (or correlated) with Swedbank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swedbank AB has no effect on the direction of Nordic Asia i.e., Nordic Asia and Swedbank go up and down completely randomly.
Pair Corralation between Nordic Asia and Swedbank
Assuming the 90 days trading horizon Nordic Asia Investment is expected to under-perform the Swedbank. In addition to that, Nordic Asia is 1.46 times more volatile than Swedbank AB. It trades about -0.07 of its total potential returns per unit of risk. Swedbank AB is currently generating about -0.06 per unit of volatility. If you would invest 21,680 in Swedbank AB on August 31, 2024 and sell it today you would lose (350.00) from holding Swedbank AB or give up 1.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Nordic Asia Investment vs. Swedbank AB
Performance |
| Timeline |
| Nordic Asia Investment |
| Swedbank AB |
Nordic Asia and Swedbank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordic Asia and Swedbank
The main advantage of trading using opposite Nordic Asia and Swedbank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordic Asia position performs unexpectedly, Swedbank 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 Swedbank will offset losses from the drop in Swedbank's long position.| Nordic Asia vs. Investor AB ser | Nordic Asia vs. Investment AB Latour | Nordic Asia vs. Industrivarden AB ser | Nordic Asia vs. Tele2 AB |
| Swedbank vs. Svenska Handelsbanken AB | Swedbank vs. Telia Company AB | Swedbank vs. Tele2 AB | Swedbank vs. H M Hennes |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
Other Complementary Tools
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |