Correlation Between Nordea Bank and Rottneros
Can any of the company-specific risk be diversified away by investing in both Nordea Bank and Rottneros 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 Rottneros 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 Rottneros AB, you can compare the effects of market volatilities on Nordea Bank and Rottneros 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 Rottneros. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordea Bank and Rottneros.
Diversification Opportunities for Nordea Bank and Rottneros
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Nordea and Rottneros is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Nordea Bank Abp and Rottneros AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rottneros 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 Rottneros. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rottneros AB has no effect on the direction of Nordea Bank i.e., Nordea Bank and Rottneros go up and down completely randomly.
Pair Corralation between Nordea Bank and Rottneros
Assuming the 90 days trading horizon Nordea Bank Abp is expected to generate 0.47 times more return on investment than Rottneros. However, Nordea Bank Abp is 2.12 times less risky than Rottneros. It trades about -0.05 of its potential returns per unit of risk. Rottneros AB is currently generating about -0.08 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 | 95.65% |
| Values | Daily Returns |
Nordea Bank Abp vs. Rottneros AB
Performance |
| Timeline |
| Nordea Bank Abp |
| Rottneros AB |
Nordea Bank and Rottneros Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordea Bank and Rottneros
The main advantage of trading using opposite Nordea Bank and Rottneros positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordea Bank position performs unexpectedly, Rottneros 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 Rottneros will offset losses from the drop in Rottneros' 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 |
| Rottneros vs. Holmen AB | Rottneros vs. Svenska Cellulosa Aktiebolaget | Rottneros vs. Husqvarna AB | Rottneros vs. Alfa Laval 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |