Correlation Between Nordea Bank and Metacon AB
Can any of the company-specific risk be diversified away by investing in both Nordea Bank and Metacon 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 Metacon 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 Metacon AB, you can compare the effects of market volatilities on Nordea Bank and Metacon 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 Metacon AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordea Bank and Metacon AB.
Diversification Opportunities for Nordea Bank and Metacon AB
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Nordea and Metacon is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Nordea Bank Abp and Metacon AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metacon 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 Metacon AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metacon AB has no effect on the direction of Nordea Bank i.e., Nordea Bank and Metacon AB go up and down completely randomly.
Pair Corralation between Nordea Bank and Metacon AB
Assuming the 90 days trading horizon Nordea Bank Abp is expected to generate 0.24 times more return on investment than Metacon AB. However, Nordea Bank Abp is 4.2 times less risky than Metacon AB. It trades about 0.51 of its potential returns per unit of risk. Metacon AB is currently generating about -0.18 per unit of risk. If you would invest 12,030 in Nordea Bank Abp on October 29, 2024 and sell it today you would earn a total of 1,255 from holding Nordea Bank Abp or generate 10.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nordea Bank Abp vs. Metacon AB
Performance |
| Timeline |
| Nordea Bank Abp |
| Metacon AB |
Nordea Bank and Metacon AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordea Bank and Metacon AB
The main advantage of trading using opposite Nordea Bank and Metacon AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordea Bank position performs unexpectedly, Metacon 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 Metacon AB will offset losses from the drop in Metacon AB's long position.| Nordea Bank vs. Havsfrun Investment AB | Nordea Bank vs. FormPipe Software AB | Nordea Bank vs. USWE Sports AB | Nordea Bank vs. Nitro Games Oyj |
| Metacon AB vs. Spago Nanomedical AB | Metacon AB vs. Systemair AB | Metacon AB vs. Maven Wireless Sweden | Metacon AB vs. COOR Service Management |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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