Correlation Between Nordea Bank and Titanium Oyj
Can any of the company-specific risk be diversified away by investing in both Nordea Bank and Titanium 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 Titanium 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 Titanium Oyj, you can compare the effects of market volatilities on Nordea Bank and Titanium 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 Titanium Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordea Bank and Titanium Oyj.
Diversification Opportunities for Nordea Bank and Titanium Oyj
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nordea and Titanium is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Nordea Bank Abp and Titanium Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Titanium 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 Titanium Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Titanium Oyj has no effect on the direction of Nordea Bank i.e., Nordea Bank and Titanium Oyj go up and down completely randomly.
Pair Corralation between Nordea Bank and Titanium Oyj
Assuming the 90 days trading horizon Nordea Bank Abp is expected to under-perform the Titanium Oyj. But the stock apears to be less risky and, when comparing its historical volatility, Nordea Bank Abp is 1.9 times less risky than Titanium Oyj. The stock trades about -0.15 of its potential returns per unit of risk. The Titanium Oyj is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 980.00 in Titanium Oyj on September 3, 2024 and sell it today you would lose (2.00) from holding Titanium Oyj or give up 0.2% 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. Titanium Oyj
Performance |
| Timeline |
| Nordea Bank Abp |
| Titanium Oyj |
Nordea Bank and Titanium Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordea Bank and Titanium Oyj
The main advantage of trading using opposite Nordea Bank and Titanium Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordea Bank position performs unexpectedly, Titanium 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 Titanium Oyj will offset losses from the drop in Titanium 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 |
| Titanium Oyj vs. Telefonaktiebolaget LM Ericsson | Titanium Oyj vs. Telia Company AB | Titanium Oyj vs. SSAB AB ser | Titanium Oyj vs. SSAB AB ser |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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