Correlation Between Nordea Bank and Maj Invest
Can any of the company-specific risk be diversified away by investing in both Nordea Bank and Maj Invest 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 Maj Invest 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 Maj Invest Pension, you can compare the effects of market volatilities on Nordea Bank and Maj Invest 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 Maj Invest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordea Bank and Maj Invest.
Diversification Opportunities for Nordea Bank and Maj Invest
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Nordea and Maj is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Nordea Bank Abp and Maj Invest Pension in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maj Invest Pension 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 Maj Invest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maj Invest Pension has no effect on the direction of Nordea Bank i.e., Nordea Bank and Maj Invest go up and down completely randomly.
Pair Corralation between Nordea Bank and Maj Invest
Assuming the 90 days trading horizon Nordea Bank is expected to generate 1.08 times less return on investment than Maj Invest. In addition to that, Nordea Bank is 3.1 times more volatile than Maj Invest Pension. It trades about 0.02 of its total potential returns per unit of risk. Maj Invest Pension is currently generating about 0.06 per unit of volatility. If you would invest 11,115 in Maj Invest Pension on August 31, 2024 and sell it today you would earn a total of 1,689 from holding Maj Invest Pension or generate 15.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nordea Bank Abp vs. Maj Invest Pension
Performance |
| Timeline |
| Nordea Bank Abp |
| Maj Invest Pension |
Nordea Bank and Maj Invest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordea Bank and Maj Invest
The main advantage of trading using opposite Nordea Bank and Maj Invest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordea Bank position performs unexpectedly, Maj Invest 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 Maj Invest will offset losses from the drop in Maj Invest'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 |
| Maj Invest vs. Prime Office AS | Maj Invest vs. Sydbank AS | Maj Invest vs. TROPHY GAMES Development | Maj Invest vs. Groenlandsbanken 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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