Correlation Between Nordea Bank and Robit Oyj
Can any of the company-specific risk be diversified away by investing in both Nordea Bank and Robit 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 Robit 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 Robit Oyj, you can compare the effects of market volatilities on Nordea Bank and Robit 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 Robit Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordea Bank and Robit Oyj.
Diversification Opportunities for Nordea Bank and Robit Oyj
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nordea and Robit is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Nordea Bank Abp and Robit Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Robit 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 Robit Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Robit Oyj has no effect on the direction of Nordea Bank i.e., Nordea Bank and Robit Oyj go up and down completely randomly.
Pair Corralation between Nordea Bank and Robit Oyj
Assuming the 90 days trading horizon Nordea Bank Abp is expected to under-perform the Robit Oyj. But the stock apears to be less risky and, when comparing its historical volatility, Nordea Bank Abp is 1.41 times less risky than Robit Oyj. The stock trades about -0.14 of its potential returns per unit of risk. The Robit Oyj is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 138.00 in Robit Oyj on August 30, 2024 and sell it today you would lose (3.00) from holding Robit Oyj or give up 2.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nordea Bank Abp vs. Robit Oyj
Performance |
| Timeline |
| Nordea Bank Abp |
| Robit Oyj |
Nordea Bank and Robit Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordea Bank and Robit Oyj
The main advantage of trading using opposite Nordea Bank and Robit Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordea Bank position performs unexpectedly, Robit 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 Robit Oyj will offset losses from the drop in Robit 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 |
| Robit Oyj vs. Telefonaktiebolaget LM Ericsson | Robit Oyj vs. SSAB AB ser | Robit Oyj vs. SSAB AB ser | Robit Oyj vs. Telia Company AB |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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