Correlation Between Nordea Bank and Stenocare
Can any of the company-specific risk be diversified away by investing in both Nordea Bank and Stenocare 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 Stenocare 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 Stenocare AS, you can compare the effects of market volatilities on Nordea Bank and Stenocare 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 Stenocare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordea Bank and Stenocare.
Diversification Opportunities for Nordea Bank and Stenocare
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Nordea and Stenocare is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Nordea Bank Abp and Stenocare AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stenocare 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 Stenocare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stenocare AS has no effect on the direction of Nordea Bank i.e., Nordea Bank and Stenocare go up and down completely randomly.
Pair Corralation between Nordea Bank and Stenocare
Assuming the 90 days trading horizon Nordea Bank Abp is expected to generate 0.11 times more return on investment than Stenocare. However, Nordea Bank Abp is 9.47 times less risky than Stenocare. It trades about 0.28 of its potential returns per unit of risk. Stenocare AS is currently generating about -0.26 per unit of risk. If you would invest 8,656 in Nordea Bank Abp on November 27, 2024 and sell it today you would earn a total of 566.00 from holding Nordea Bank Abp or generate 6.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nordea Bank Abp vs. Stenocare AS
Performance |
| Timeline |
| Nordea Bank Abp |
| Stenocare AS |
Nordea Bank and Stenocare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordea Bank and Stenocare
The main advantage of trading using opposite Nordea Bank and Stenocare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordea Bank position performs unexpectedly, Stenocare 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 Stenocare will offset losses from the drop in Stenocare'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 |
| Stenocare vs. Embla Medical hf | Stenocare vs. Fynske Bank AS | Stenocare vs. Jyske Bank AS | Stenocare vs. Scandinavian Medical Solutions |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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