Correlation Between Nordea Bank and WITHSECURE
Can any of the company-specific risk be diversified away by investing in both Nordea Bank and WITHSECURE 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 WITHSECURE 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 WITHSECURE, you can compare the effects of market volatilities on Nordea Bank and WITHSECURE 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 WITHSECURE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordea Bank and WITHSECURE.
Diversification Opportunities for Nordea Bank and WITHSECURE
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Nordea and WITHSECURE is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Nordea Bank Abp and WITHSECURE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WITHSECURE 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 WITHSECURE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WITHSECURE has no effect on the direction of Nordea Bank i.e., Nordea Bank and WITHSECURE go up and down completely randomly.
Pair Corralation between Nordea Bank and WITHSECURE
Assuming the 90 days trading horizon Nordea Bank Abp is expected to generate 0.55 times more return on investment than WITHSECURE. However, Nordea Bank Abp is 1.83 times less risky than WITHSECURE. It trades about -0.03 of its potential returns per unit of risk. WITHSECURE is currently generating about -0.17 per unit of risk. If you would invest 1,080 in Nordea Bank Abp on August 31, 2024 and sell it today you would lose (9.00) from holding Nordea Bank Abp or give up 0.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Nordea Bank Abp vs. WITHSECURE
Performance |
| Timeline |
| Nordea Bank Abp |
| WITHSECURE |
Nordea Bank and WITHSECURE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordea Bank and WITHSECURE
The main advantage of trading using opposite Nordea Bank and WITHSECURE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordea Bank position performs unexpectedly, WITHSECURE 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 WITHSECURE will offset losses from the drop in WITHSECURE'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 |
| WITHSECURE vs. F SECURE OYJ | WITHSECURE vs. Qt Group Oyj | WITHSECURE vs. Tokmanni Group Oyj | WITHSECURE vs. Harvia 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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