Correlation Between Nordea Bank and Flgger Group
Can any of the company-specific risk be diversified away by investing in both Nordea Bank and Flgger Group 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 Flgger Group 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 Flgger group AS, you can compare the effects of market volatilities on Nordea Bank and Flgger Group 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 Flgger Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordea Bank and Flgger Group.
Diversification Opportunities for Nordea Bank and Flgger Group
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Nordea and Flgger is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Nordea Bank Abp and Flgger group AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flgger group 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 Flgger Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flgger group AS has no effect on the direction of Nordea Bank i.e., Nordea Bank and Flgger Group go up and down completely randomly.
Pair Corralation between Nordea Bank and Flgger Group
Assuming the 90 days trading horizon Nordea Bank Abp is expected to under-perform the Flgger Group. In addition to that, Nordea Bank is 1.14 times more volatile than Flgger group AS. It trades about -0.02 of its total potential returns per unit of risk. Flgger group AS is currently generating about -0.02 per unit of volatility. If you would invest 34,200 in Flgger group AS on August 25, 2024 and sell it today you would lose (1,600) from holding Flgger group AS or give up 4.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nordea Bank Abp vs. Flgger group AS
Performance |
| Timeline |
| Nordea Bank Abp |
| Flgger group AS |
Nordea Bank and Flgger Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordea Bank and Flgger Group
The main advantage of trading using opposite Nordea Bank and Flgger Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordea Bank position performs unexpectedly, Flgger Group 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 Flgger Group will offset losses from the drop in Flgger Group'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 |
| Flgger Group vs. Per Aarsleff Holding | Flgger Group vs. North Media AS | Flgger Group vs. HH International AS | Flgger Group vs. Matas 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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