Correlation Between Nordea Bank and Danske Andelskassers
Can any of the company-specific risk be diversified away by investing in both Nordea Bank and Danske Andelskassers 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 Danske Andelskassers 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 Danske Andelskassers Bank, you can compare the effects of market volatilities on Nordea Bank and Danske Andelskassers 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 Danske Andelskassers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordea Bank and Danske Andelskassers.
Diversification Opportunities for Nordea Bank and Danske Andelskassers
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nordea and Danske is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Nordea Bank Abp and Danske Andelskassers Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Danske Andelskassers Bank 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 Danske Andelskassers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Danske Andelskassers Bank has no effect on the direction of Nordea Bank i.e., Nordea Bank and Danske Andelskassers go up and down completely randomly.
Pair Corralation between Nordea Bank and Danske Andelskassers
Assuming the 90 days trading horizon Nordea Bank Abp is expected to generate 1.4 times more return on investment than Danske Andelskassers. However, Nordea Bank is 1.4 times more volatile than Danske Andelskassers Bank. It trades about 0.01 of its potential returns per unit of risk. Danske Andelskassers Bank is currently generating about -0.06 per unit of risk. If you would invest 7,986 in Nordea Bank Abp on September 1, 2024 and sell it today you would earn a total of 2.00 from holding Nordea Bank Abp or generate 0.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nordea Bank Abp vs. Danske Andelskassers Bank
Performance |
| Timeline |
| Nordea Bank Abp |
| Danske Andelskassers Bank |
Nordea Bank and Danske Andelskassers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordea Bank and Danske Andelskassers
The main advantage of trading using opposite Nordea Bank and Danske Andelskassers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordea Bank position performs unexpectedly, Danske Andelskassers 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 Danske Andelskassers will offset losses from the drop in Danske Andelskassers' long position.| Nordea Bank vs. Jyske Bank AS | Nordea Bank vs. Tryg AS | Nordea Bank vs. Danske Bank AS | Nordea Bank vs. ISS AS |
| Danske Andelskassers vs. Vestjysk Bank AS | Danske Andelskassers vs. Spar Nord Bank | Danske Andelskassers vs. Skjern Bank AS | Danske Andelskassers vs. RTX 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments |