Correlation Between Nordea Bank and LeadDesk Oyj
Can any of the company-specific risk be diversified away by investing in both Nordea Bank and LeadDesk 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 LeadDesk 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 LeadDesk Oyj, you can compare the effects of market volatilities on Nordea Bank and LeadDesk 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 LeadDesk Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordea Bank and LeadDesk Oyj.
Diversification Opportunities for Nordea Bank and LeadDesk Oyj
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nordea and LeadDesk is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Nordea Bank Abp and LeadDesk Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LeadDesk 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 LeadDesk Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LeadDesk Oyj has no effect on the direction of Nordea Bank i.e., Nordea Bank and LeadDesk Oyj go up and down completely randomly.
Pair Corralation between Nordea Bank and LeadDesk Oyj
Assuming the 90 days trading horizon Nordea Bank Abp is expected to generate 0.46 times more return on investment than LeadDesk Oyj. However, Nordea Bank Abp is 2.16 times less risky than LeadDesk Oyj. It trades about 0.08 of its potential returns per unit of risk. LeadDesk Oyj is currently generating about -0.06 per unit of risk. If you would invest 1,052 in Nordea Bank Abp on September 14, 2024 and sell it today you would earn a total of 17.00 from holding Nordea Bank Abp or generate 1.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nordea Bank Abp vs. LeadDesk Oyj
Performance |
| Timeline |
| Nordea Bank Abp |
| LeadDesk Oyj |
Nordea Bank and LeadDesk Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordea Bank and LeadDesk Oyj
The main advantage of trading using opposite Nordea Bank and LeadDesk Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordea Bank position performs unexpectedly, LeadDesk 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 LeadDesk Oyj will offset losses from the drop in LeadDesk 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 |
| LeadDesk Oyj vs. HKFoods Oyj A | LeadDesk Oyj vs. QPR Software Oyj | LeadDesk Oyj vs. SSH Communications Security | LeadDesk Oyj vs. Alandsbanken Abp A |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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