Correlation Between Nordea Bank and FormPipe Software
Can any of the company-specific risk be diversified away by investing in both Nordea Bank and FormPipe Software 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 FormPipe Software 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 FormPipe Software AB, you can compare the effects of market volatilities on Nordea Bank and FormPipe Software 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 FormPipe Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordea Bank and FormPipe Software.
Diversification Opportunities for Nordea Bank and FormPipe Software
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Nordea and FormPipe is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Nordea Bank Abp and FormPipe Software AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FormPipe Software 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 FormPipe Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FormPipe Software has no effect on the direction of Nordea Bank i.e., Nordea Bank and FormPipe Software go up and down completely randomly.
Pair Corralation between Nordea Bank and FormPipe Software
Assuming the 90 days trading horizon Nordea Bank Abp is expected to generate 0.57 times more return on investment than FormPipe Software. However, Nordea Bank Abp is 1.75 times less risky than FormPipe Software. It trades about 0.04 of its potential returns per unit of risk. FormPipe Software AB is currently generating about -0.05 per unit of risk. If you would invest 11,960 in Nordea Bank Abp on August 30, 2024 and sell it today you would earn a total of 230.00 from holding Nordea Bank Abp or generate 1.92% 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. FormPipe Software AB
Performance |
| Timeline |
| Nordea Bank Abp |
| FormPipe Software |
Nordea Bank and FormPipe Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordea Bank and FormPipe Software
The main advantage of trading using opposite Nordea Bank and FormPipe Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordea Bank position performs unexpectedly, FormPipe Software 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 FormPipe Software will offset losses from the drop in FormPipe Software's long position.| Nordea Bank vs. Soder Sportfiske AB | Nordea Bank vs. Invisio Communications AB | Nordea Bank vs. Redsense Medical AB | Nordea Bank vs. USWE Sports AB |
| FormPipe Software vs. Enea AB | FormPipe Software vs. Novotek AB | FormPipe Software vs. Addnode Group AB | FormPipe Software vs. Softronic 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |