Correlation Between Nordea Bank and Catena Media
Can any of the company-specific risk be diversified away by investing in both Nordea Bank and Catena Media 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 Catena Media 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 Catena Media plc, you can compare the effects of market volatilities on Nordea Bank and Catena Media 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 Catena Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordea Bank and Catena Media.
Diversification Opportunities for Nordea Bank and Catena Media
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Nordea and Catena is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Nordea Bank Abp and Catena Media plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catena Media plc 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 Catena Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catena Media plc has no effect on the direction of Nordea Bank i.e., Nordea Bank and Catena Media go up and down completely randomly.
Pair Corralation between Nordea Bank and Catena Media
Assuming the 90 days trading horizon Nordea Bank Abp is expected to generate 0.19 times more return on investment than Catena Media. However, Nordea Bank Abp is 5.24 times less risky than Catena Media. It trades about -0.05 of its potential returns per unit of risk. Catena Media plc is currently generating about -0.17 per unit of risk. If you would invest 12,470 in Nordea Bank Abp on September 1, 2024 and sell it today you would lose (135.00) from holding Nordea Bank Abp or give up 1.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nordea Bank Abp vs. Catena Media plc
Performance |
| Timeline |
| Nordea Bank Abp |
| Catena Media plc |
Nordea Bank and Catena Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordea Bank and Catena Media
The main advantage of trading using opposite Nordea Bank and Catena Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordea Bank position performs unexpectedly, Catena Media 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 Catena Media will offset losses from the drop in Catena Media's long position.| Nordea Bank vs. High Coast Distillery | Nordea Bank vs. Viva Wine Group | Nordea Bank vs. Lohilo Foods AB | Nordea Bank vs. Fractal Gaming Group |
| Catena Media vs. Betsson AB | Catena Media vs. Kambi Group PLC | Catena Media vs. Better Collective | Catena Media vs. Evolution 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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