Correlation Between Nordea Bank and PARKEN Sport
Can any of the company-specific risk be diversified away by investing in both Nordea Bank and PARKEN Sport 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 PARKEN Sport 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 PARKEN Sport Entertainment, you can compare the effects of market volatilities on Nordea Bank and PARKEN Sport 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 PARKEN Sport. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordea Bank and PARKEN Sport.
Diversification Opportunities for Nordea Bank and PARKEN Sport
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Nordea and PARKEN is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Nordea Bank Abp and PARKEN Sport Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PARKEN Sport Enterta 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 PARKEN Sport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PARKEN Sport Enterta has no effect on the direction of Nordea Bank i.e., Nordea Bank and PARKEN Sport go up and down completely randomly.
Pair Corralation between Nordea Bank and PARKEN Sport
Assuming the 90 days trading horizon Nordea Bank Abp is expected to under-perform the PARKEN Sport. But the stock apears to be less risky and, when comparing its historical volatility, Nordea Bank Abp is 1.25 times less risky than PARKEN Sport. The stock trades about -0.13 of its potential returns per unit of risk. The PARKEN Sport Entertainment is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 12,350 in PARKEN Sport Entertainment on August 29, 2024 and sell it today you would lose (300.00) from holding PARKEN Sport Entertainment or give up 2.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nordea Bank Abp vs. PARKEN Sport Entertainment
Performance |
| Timeline |
| Nordea Bank Abp |
| PARKEN Sport Enterta |
Nordea Bank and PARKEN Sport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordea Bank and PARKEN Sport
The main advantage of trading using opposite Nordea Bank and PARKEN Sport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordea Bank position performs unexpectedly, PARKEN Sport 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 PARKEN Sport will offset losses from the drop in PARKEN Sport'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 |
| PARKEN Sport vs. Broendbyernes IF Fodbold | PARKEN Sport vs. Bang Olufsen | PARKEN Sport vs. Matas AS | PARKEN Sport vs. NKT 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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