Correlation Between Nordea Bank and Intrum Justitia
Can any of the company-specific risk be diversified away by investing in both Nordea Bank and Intrum Justitia 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 Intrum Justitia 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 Intrum Justitia AB, you can compare the effects of market volatilities on Nordea Bank and Intrum Justitia 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 Intrum Justitia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordea Bank and Intrum Justitia.
Diversification Opportunities for Nordea Bank and Intrum Justitia
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Nordea and Intrum is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Nordea Bank Abp and Intrum Justitia AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intrum Justitia 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 Intrum Justitia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intrum Justitia AB has no effect on the direction of Nordea Bank i.e., Nordea Bank and Intrum Justitia go up and down completely randomly.
Pair Corralation between Nordea Bank and Intrum Justitia
Assuming the 90 days trading horizon Nordea Bank Abp is expected to generate 0.19 times more return on investment than Intrum Justitia. However, Nordea Bank Abp is 5.17 times less risky than Intrum Justitia. It trades about -0.04 of its potential returns per unit of risk. Intrum Justitia AB is currently generating about -0.16 per unit of risk. If you would invest 12,455 in Nordea Bank Abp on August 24, 2024 and sell it today you would lose (110.00) from holding Nordea Bank Abp or give up 0.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Nordea Bank Abp vs. Intrum Justitia AB
Performance |
| Timeline |
| Nordea Bank Abp |
| Intrum Justitia AB |
Nordea Bank and Intrum Justitia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordea Bank and Intrum Justitia
The main advantage of trading using opposite Nordea Bank and Intrum Justitia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordea Bank position performs unexpectedly, Intrum Justitia 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 Intrum Justitia will offset losses from the drop in Intrum Justitia's long position.| Nordea Bank vs. Skandinaviska Enskilda Banken | Nordea Bank vs. Skandinaviska Enskilda Banken | Nordea Bank vs. Swedbank AB | Nordea Bank vs. Arion banki hf |
| Intrum Justitia vs. Tele2 AB | Intrum Justitia vs. Castellum AB | Intrum Justitia vs. Telia Company AB | Intrum Justitia vs. Svenska Handelsbanken 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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