Correlation Between Nordea Bank and Careium AB
Can any of the company-specific risk be diversified away by investing in both Nordea Bank and Careium AB 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 Careium AB 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 Careium AB, you can compare the effects of market volatilities on Nordea Bank and Careium AB 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 Careium AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordea Bank and Careium AB.
Diversification Opportunities for Nordea Bank and Careium AB
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nordea and Careium is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Nordea Bank Abp and Careium AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Careium AB 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 Careium AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Careium AB has no effect on the direction of Nordea Bank i.e., Nordea Bank and Careium AB go up and down completely randomly.
Pair Corralation between Nordea Bank and Careium AB
Assuming the 90 days trading horizon Nordea Bank Abp is expected to generate 0.75 times more return on investment than Careium AB. However, Nordea Bank Abp is 1.34 times less risky than Careium AB. It trades about -0.01 of its potential returns per unit of risk. Careium AB is currently generating about -0.09 per unit of risk. If you would invest 12,240 in Nordea Bank Abp on September 13, 2024 and sell it today you would lose (40.00) from holding Nordea Bank Abp or give up 0.33% 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. Careium AB
Performance |
| Timeline |
| Nordea Bank Abp |
| Careium AB |
Nordea Bank and Careium AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordea Bank and Careium AB
The main advantage of trading using opposite Nordea Bank and Careium AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordea Bank position performs unexpectedly, Careium AB 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 Careium AB will offset losses from the drop in Careium AB's long position.| Nordea Bank vs. Skandinaviska Enskilda Banken | Nordea Bank vs. Swedbank AB | Nordea Bank vs. Avanza Bank Holding | Nordea Bank vs. Arion banki hf |
| Careium AB vs. Humble Group AB | Careium AB vs. Enad Global 7 | Careium AB vs. Goodbye Kansas Group | Careium AB vs. KABE Group 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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