Correlation Between Nordea Bank and LED IBond
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By analyzing existing cross correlation between Nordea Bank Abp and LED iBond International, you can compare the effects of market volatilities on Nordea Bank and LED IBond 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 LED IBond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordea Bank and LED IBond.
Diversification Opportunities for Nordea Bank and LED IBond
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Nordea and LED is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Nordea Bank Abp and LED iBond International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LED iBond International 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 LED IBond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LED iBond International has no effect on the direction of Nordea Bank i.e., Nordea Bank and LED IBond go up and down completely randomly.
Pair Corralation between Nordea Bank and LED IBond
Assuming the 90 days trading horizon Nordea Bank is expected to generate 2.0 times less return on investment than LED IBond. But when comparing it to its historical volatility, Nordea Bank Abp is 7.23 times less risky than LED IBond. It trades about 0.04 of its potential returns per unit of risk. LED iBond International is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 85.00 in LED iBond International on December 8, 2024 and sell it today you would lose (65.00) from holding LED iBond International or give up 76.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nordea Bank Abp vs. LED iBond International
Performance |
| Timeline |
| Nordea Bank Abp |
| LED iBond International |
Nordea Bank and LED IBond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordea Bank and LED IBond
The main advantage of trading using opposite Nordea Bank and LED IBond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordea Bank position performs unexpectedly, LED IBond 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 LED IBond will offset losses from the drop in LED IBond's long position.| Nordea Bank vs. Jyske Bank 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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