Correlation Between Nordea Bank and TROPHY GAMES
Can any of the company-specific risk be diversified away by investing in both Nordea Bank and TROPHY GAMES 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 TROPHY GAMES 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 TROPHY GAMES Development, you can compare the effects of market volatilities on Nordea Bank and TROPHY GAMES 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 TROPHY GAMES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordea Bank and TROPHY GAMES.
Diversification Opportunities for Nordea Bank and TROPHY GAMES
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Nordea and TROPHY is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Nordea Bank Abp and TROPHY GAMES Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TROPHY GAMES Development 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 TROPHY GAMES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TROPHY GAMES Development has no effect on the direction of Nordea Bank i.e., Nordea Bank and TROPHY GAMES go up and down completely randomly.
Pair Corralation between Nordea Bank and TROPHY GAMES
Assuming the 90 days trading horizon Nordea Bank Abp is expected to generate 0.46 times more return on investment than TROPHY GAMES. However, Nordea Bank Abp is 2.18 times less risky than TROPHY GAMES. It trades about -0.13 of its potential returns per unit of risk. TROPHY GAMES Development is currently generating about -0.13 per unit of risk. If you would invest 8,164 in Nordea Bank Abp on August 29, 2024 and sell it today you would lose (280.00) from holding Nordea Bank Abp or give up 3.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nordea Bank Abp vs. TROPHY GAMES Development
Performance |
| Timeline |
| Nordea Bank Abp |
| TROPHY GAMES Development |
Nordea Bank and TROPHY GAMES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordea Bank and TROPHY GAMES
The main advantage of trading using opposite Nordea Bank and TROPHY GAMES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordea Bank position performs unexpectedly, TROPHY GAMES 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 TROPHY GAMES will offset losses from the drop in TROPHY GAMES'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 |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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