Correlation Between Nordea Bank and GN Store
Can any of the company-specific risk be diversified away by investing in both Nordea Bank and GN Store 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 GN Store 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 GN Store Nord, you can compare the effects of market volatilities on Nordea Bank and GN Store 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 GN Store. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordea Bank and GN Store.
Diversification Opportunities for Nordea Bank and GN Store
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nordea and GN Store is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Nordea Bank Abp and GN Store Nord in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GN Store Nord 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 GN Store. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GN Store Nord has no effect on the direction of Nordea Bank i.e., Nordea Bank and GN Store go up and down completely randomly.
Pair Corralation between Nordea Bank and GN Store
Assuming the 90 days trading horizon Nordea Bank Abp is expected to generate 0.53 times more return on investment than GN Store. However, Nordea Bank Abp is 1.9 times less risky than GN Store. It trades about 0.03 of its potential returns per unit of risk. GN Store Nord is currently generating about 0.0 per unit of risk. If you would invest 6,743 in Nordea Bank Abp on August 29, 2024 and sell it today you would earn a total of 1,141 from holding Nordea Bank Abp or generate 16.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nordea Bank Abp vs. GN Store Nord
Performance |
| Timeline |
| Nordea Bank Abp |
| GN Store Nord |
Nordea Bank and GN Store Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordea Bank and GN Store
The main advantage of trading using opposite Nordea Bank and GN Store positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordea Bank position performs unexpectedly, GN Store 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 GN Store will offset losses from the drop in GN Store'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 |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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