Correlation Between Nordea Bank and Carnegie Wealth
Can any of the company-specific risk be diversified away by investing in both Nordea Bank and Carnegie Wealth 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 Carnegie Wealth 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 Carnegie Wealth Management, you can compare the effects of market volatilities on Nordea Bank and Carnegie Wealth 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 Carnegie Wealth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordea Bank and Carnegie Wealth.
Diversification Opportunities for Nordea Bank and Carnegie Wealth
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Nordea and Carnegie is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Nordea Bank Abp and Carnegie Wealth Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carnegie Wealth Mana 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 Carnegie Wealth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carnegie Wealth Mana has no effect on the direction of Nordea Bank i.e., Nordea Bank and Carnegie Wealth go up and down completely randomly.
Pair Corralation between Nordea Bank and Carnegie Wealth
Assuming the 90 days trading horizon Nordea Bank Abp is expected to under-perform the Carnegie Wealth. In addition to that, Nordea Bank is 1.08 times more volatile than Carnegie Wealth Management. It trades about -0.13 of its total potential returns per unit of risk. Carnegie Wealth Management is currently generating about -0.13 per unit of volatility. If you would invest 12,990 in Carnegie Wealth Management on August 29, 2024 and sell it today you would lose (420.00) from holding Carnegie Wealth Management or give up 3.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nordea Bank Abp vs. Carnegie Wealth Management
Performance |
| Timeline |
| Nordea Bank Abp |
| Carnegie Wealth Mana |
Nordea Bank and Carnegie Wealth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordea Bank and Carnegie Wealth
The main advantage of trading using opposite Nordea Bank and Carnegie Wealth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordea Bank position performs unexpectedly, Carnegie Wealth 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 Carnegie Wealth will offset losses from the drop in Carnegie Wealth'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 |
| Carnegie Wealth vs. Djurslands Bank | Carnegie Wealth vs. Nordfyns Bank AS | Carnegie Wealth vs. Groenlandsbanken AS | Carnegie Wealth vs. Kreditbanken 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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