Correlation Between Nordea Bank and Carlsberg
Can any of the company-specific risk be diversified away by investing in both Nordea Bank and Carlsberg 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 Nordea Bank and Carlsberg into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nordea Bank Abp and Carlsberg AS, you can compare the effects of market volatilities on Nordea Bank and Carlsberg 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 Nordea Bank with a short position of Carlsberg. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordea Bank and Carlsberg.
Diversification Opportunities for Nordea Bank and Carlsberg
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nordea and Carlsberg is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Nordea Bank Abp and Carlsberg AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carlsberg AS and Nordea Bank 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 Nordea Bank Abp are associated (or correlated) with Carlsberg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carlsberg AS has no effect on the direction of Nordea Bank i.e., Nordea Bank and Carlsberg go up and down completely randomly.
Pair Corralation between Nordea Bank and Carlsberg
Assuming the 90 days trading horizon Nordea Bank Abp is expected to generate 0.66 times more return on investment than Carlsberg. However, Nordea Bank Abp is 1.52 times less risky than Carlsberg. It trades about -0.12 of its potential returns per unit of risk. Carlsberg AS is currently generating about -0.12 per unit of risk. If you would invest 8,164 in Nordea Bank Abp on August 28, 2024 and sell it today you would lose (240.00) from holding Nordea Bank Abp or give up 2.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Nordea Bank Abp vs. Carlsberg AS
Performance |
| Timeline |
| Nordea Bank Abp |
| Carlsberg AS |
Nordea Bank and Carlsberg Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordea Bank and Carlsberg
The main advantage of trading using opposite Nordea Bank and Carlsberg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordea Bank position performs unexpectedly, Carlsberg 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 Carlsberg will offset losses from the drop in Carlsberg's long position.| Nordea Bank vs. Jyske Bank AS | Nordea Bank vs. Tryg AS | Nordea Bank vs. Danske Bank AS | Nordea Bank vs. ISS AS |
| Carlsberg vs. Laan Spar Bank | Carlsberg vs. Vestjysk Bank AS | Carlsberg vs. NTG Nordic Transport | Carlsberg vs. Fynske Bank 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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