Correlation Between Nordea Bank and Fiskars Oyj
Can any of the company-specific risk be diversified away by investing in both Nordea Bank and Fiskars Oyj 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 Fiskars Oyj 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 Fiskars Oyj Abp, you can compare the effects of market volatilities on Nordea Bank and Fiskars Oyj 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 Fiskars Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordea Bank and Fiskars Oyj.
Diversification Opportunities for Nordea Bank and Fiskars Oyj
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Nordea and Fiskars is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Nordea Bank Abp and Fiskars Oyj Abp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fiskars Oyj Abp 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 Fiskars Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fiskars Oyj Abp has no effect on the direction of Nordea Bank i.e., Nordea Bank and Fiskars Oyj go up and down completely randomly.
Pair Corralation between Nordea Bank and Fiskars Oyj
Assuming the 90 days trading horizon Nordea Bank Abp is expected to generate 0.82 times more return on investment than Fiskars Oyj. However, Nordea Bank Abp is 1.22 times less risky than Fiskars Oyj. It trades about -0.13 of its potential returns per unit of risk. Fiskars Oyj Abp is currently generating about -0.23 per unit of risk. If you would invest 1,101 in Nordea Bank Abp on September 2, 2024 and sell it today you would lose (30.00) from holding Nordea Bank Abp or give up 2.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nordea Bank Abp vs. Fiskars Oyj Abp
Performance |
| Timeline |
| Nordea Bank Abp |
| Fiskars Oyj Abp |
Nordea Bank and Fiskars Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordea Bank and Fiskars Oyj
The main advantage of trading using opposite Nordea Bank and Fiskars Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordea Bank position performs unexpectedly, Fiskars Oyj 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 Fiskars Oyj will offset losses from the drop in Fiskars Oyj's long position.| Nordea Bank vs. Sampo Oyj A | Nordea Bank vs. Fortum Oyj | Nordea Bank vs. UPM Kymmene Oyj | Nordea Bank vs. Neste Oil Oyj |
| Fiskars Oyj vs. Sampo Oyj A | Fiskars Oyj vs. Harvia Oyj | Fiskars Oyj vs. Nordea Bank Abp | Fiskars Oyj vs. Fortum Oyj |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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