Correlation Between Nordea Bank and United Bankers
Can any of the company-specific risk be diversified away by investing in both Nordea Bank and United Bankers 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 United Bankers 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 United Bankers Oyj, you can compare the effects of market volatilities on Nordea Bank and United Bankers 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 United Bankers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordea Bank and United Bankers.
Diversification Opportunities for Nordea Bank and United Bankers
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Nordea and United is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Nordea Bank Abp and United Bankers Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Bankers 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 United Bankers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Bankers Oyj has no effect on the direction of Nordea Bank i.e., Nordea Bank and United Bankers go up and down completely randomly.
Pair Corralation between Nordea Bank and United Bankers
Assuming the 90 days trading horizon Nordea Bank is expected to generate 2.55 times less return on investment than United Bankers. But when comparing it to its historical volatility, Nordea Bank Abp is 1.56 times less risky than United Bankers. It trades about 0.04 of its potential returns per unit of risk. United Bankers Oyj is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,353 in United Bankers Oyj on August 26, 2024 and sell it today you would earn a total of 467.00 from holding United Bankers Oyj or generate 34.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nordea Bank Abp vs. United Bankers Oyj
Performance |
| Timeline |
| Nordea Bank Abp |
| United Bankers Oyj |
Nordea Bank and United Bankers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordea Bank and United Bankers
The main advantage of trading using opposite Nordea Bank and United Bankers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordea Bank position performs unexpectedly, United Bankers 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 United Bankers will offset losses from the drop in United Bankers' 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 |
| United Bankers vs. Vaisala Oyj A | United Bankers vs. CapMan Oyj B | United Bankers vs. HKFoods Oyj A | United Bankers 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 CEOs Directory module to screen CEOs from public companies around the world.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |