Correlation Between Nordea Bank and Precio Fishbone
Can any of the company-specific risk be diversified away by investing in both Nordea Bank and Precio Fishbone 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 Precio Fishbone 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 Precio Fishbone AB, you can compare the effects of market volatilities on Nordea Bank and Precio Fishbone 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 Precio Fishbone. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordea Bank and Precio Fishbone.
Diversification Opportunities for Nordea Bank and Precio Fishbone
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nordea and Precio is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Nordea Bank Abp and Precio Fishbone AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Precio Fishbone 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 Precio Fishbone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Precio Fishbone AB has no effect on the direction of Nordea Bank i.e., Nordea Bank and Precio Fishbone go up and down completely randomly.
Pair Corralation between Nordea Bank and Precio Fishbone
Assuming the 90 days trading horizon Nordea Bank is expected to generate 1.14 times less return on investment than Precio Fishbone. But when comparing it to its historical volatility, Nordea Bank Abp is 2.33 times less risky than Precio Fishbone. It trades about 0.16 of its potential returns per unit of risk. Precio Fishbone AB is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 2,200 in Precio Fishbone AB on November 27, 2024 and sell it today you would earn a total of 80.00 from holding Precio Fishbone AB or generate 3.64% 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. Precio Fishbone AB
Performance |
| Timeline |
| Nordea Bank Abp |
| Precio Fishbone AB |
Nordea Bank and Precio Fishbone Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordea Bank and Precio Fishbone
The main advantage of trading using opposite Nordea Bank and Precio Fishbone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordea Bank position performs unexpectedly, Precio Fishbone 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 Precio Fishbone will offset losses from the drop in Precio Fishbone's long position.| Nordea Bank vs. Invisio Communications AB | Nordea Bank vs. Raketech Group Holding | Nordea Bank vs. JLT Mobile Computers | Nordea Bank vs. Serstech AB |
| Precio Fishbone vs. Avensia publ AB | Precio Fishbone vs. Generic Sweden publ | Precio Fishbone vs. Novotek AB | Precio Fishbone vs. DevPort 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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