Correlation Between Nordea Bank and EgnsINVEST Ejendomme
Can any of the company-specific risk be diversified away by investing in both Nordea Bank and EgnsINVEST Ejendomme 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 EgnsINVEST Ejendomme 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 EgnsINVEST Ejendomme Tyskland, you can compare the effects of market volatilities on Nordea Bank and EgnsINVEST Ejendomme 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 EgnsINVEST Ejendomme. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordea Bank and EgnsINVEST Ejendomme.
Diversification Opportunities for Nordea Bank and EgnsINVEST Ejendomme
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nordea and EgnsINVEST is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Nordea Bank Abp and EgnsINVEST Ejendomme Tyskland in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EgnsINVEST Ejendomme 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 EgnsINVEST Ejendomme. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EgnsINVEST Ejendomme has no effect on the direction of Nordea Bank i.e., Nordea Bank and EgnsINVEST Ejendomme go up and down completely randomly.
Pair Corralation between Nordea Bank and EgnsINVEST Ejendomme
Assuming the 90 days trading horizon Nordea Bank Abp is expected to generate 0.92 times more return on investment than EgnsINVEST Ejendomme. However, Nordea Bank Abp is 1.08 times less risky than EgnsINVEST Ejendomme. It trades about 0.03 of its potential returns per unit of risk. EgnsINVEST Ejendomme Tyskland is currently generating about -0.04 per unit of risk. If you would invest 7,738 in Nordea Bank Abp on September 12, 2024 and sell it today you would earn a total of 168.00 from holding Nordea Bank Abp or generate 2.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nordea Bank Abp vs. EgnsINVEST Ejendomme Tyskland
Performance |
| Timeline |
| Nordea Bank Abp |
| EgnsINVEST Ejendomme |
Nordea Bank and EgnsINVEST Ejendomme Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordea Bank and EgnsINVEST Ejendomme
The main advantage of trading using opposite Nordea Bank and EgnsINVEST Ejendomme positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordea Bank position performs unexpectedly, EgnsINVEST Ejendomme 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 EgnsINVEST Ejendomme will offset losses from the drop in EgnsINVEST Ejendomme'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 |
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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.
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