Correlation Between Nordea Bank and Qt Group
Can any of the company-specific risk be diversified away by investing in both Nordea Bank and Qt Group 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 Qt Group 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 Qt Group Oyj, you can compare the effects of market volatilities on Nordea Bank and Qt Group 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 Qt Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordea Bank and Qt Group.
Diversification Opportunities for Nordea Bank and Qt Group
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nordea and QTCOM is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Nordea Bank Abp and Qt Group Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qt Group 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 Qt Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qt Group Oyj has no effect on the direction of Nordea Bank i.e., Nordea Bank and Qt Group go up and down completely randomly.
Pair Corralation between Nordea Bank and Qt Group
Assuming the 90 days trading horizon Nordea Bank Abp is expected to generate 0.24 times more return on investment than Qt Group. However, Nordea Bank Abp is 4.21 times less risky than Qt Group. It trades about -0.13 of its potential returns per unit of risk. Qt Group Oyj is currently generating about -0.23 per unit of risk. If you would invest 1,095 in Nordea Bank Abp on August 28, 2024 and sell it today you would lose (32.00) from holding Nordea Bank Abp or give up 2.92% 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. Qt Group Oyj
Performance |
| Timeline |
| Nordea Bank Abp |
| Qt Group Oyj |
Nordea Bank and Qt Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordea Bank and Qt Group
The main advantage of trading using opposite Nordea Bank and Qt Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordea Bank position performs unexpectedly, Qt Group 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 Qt Group will offset losses from the drop in Qt Group'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 |
| Qt Group vs. Harvia Oyj | Qt Group vs. Sampo Oyj A | Qt Group vs. Revenio Group | Qt Group vs. Kamux Suomi Oy |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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