Correlation Between Nordea Bank and Nightingale Health
Can any of the company-specific risk be diversified away by investing in both Nordea Bank and Nightingale Health 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 Nightingale Health 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 Nightingale Health Oyj, you can compare the effects of market volatilities on Nordea Bank and Nightingale Health 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 Nightingale Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordea Bank and Nightingale Health.
Diversification Opportunities for Nordea Bank and Nightingale Health
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Nordea and Nightingale is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Nordea Bank Abp and Nightingale Health Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nightingale Health Oyj 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 Nightingale Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nightingale Health Oyj has no effect on the direction of Nordea Bank i.e., Nordea Bank and Nightingale Health go up and down completely randomly.
Pair Corralation between Nordea Bank and Nightingale Health
Assuming the 90 days trading horizon Nordea Bank Abp is expected to under-perform the Nightingale Health. But the stock apears to be less risky and, when comparing its historical volatility, Nordea Bank Abp is 3.98 times less risky than Nightingale Health. The stock trades about -0.14 of its potential returns per unit of risk. The Nightingale Health Oyj is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 328.00 in Nightingale Health Oyj on August 30, 2024 and sell it today you would lose (14.00) from holding Nightingale Health Oyj or give up 4.27% 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. Nightingale Health Oyj
Performance |
| Timeline |
| Nordea Bank Abp |
| Nightingale Health Oyj |
Nordea Bank and Nightingale Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordea Bank and Nightingale Health
The main advantage of trading using opposite Nordea Bank and Nightingale Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordea Bank position performs unexpectedly, Nightingale Health 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 Nightingale Health will offset losses from the drop in Nightingale Health'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 |
| Nightingale Health vs. CapMan Oyj B | Nightingale Health vs. HKFoods Oyj A | Nightingale Health vs. Spinnova Oy | Nightingale Health vs. KONE 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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