Correlation Between Nordea Bank and RVRC Holding
Can any of the company-specific risk be diversified away by investing in both Nordea Bank and RVRC Holding 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 RVRC Holding 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 RVRC Holding AB, you can compare the effects of market volatilities on Nordea Bank and RVRC Holding 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 RVRC Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordea Bank and RVRC Holding.
Diversification Opportunities for Nordea Bank and RVRC Holding
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nordea and RVRC is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Nordea Bank Abp and RVRC Holding AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RVRC Holding 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 RVRC Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RVRC Holding AB has no effect on the direction of Nordea Bank i.e., Nordea Bank and RVRC Holding go up and down completely randomly.
Pair Corralation between Nordea Bank and RVRC Holding
Assuming the 90 days trading horizon Nordea Bank Abp is expected to generate 0.45 times more return on investment than RVRC Holding. However, Nordea Bank Abp is 2.21 times less risky than RVRC Holding. It trades about 0.03 of its potential returns per unit of risk. RVRC Holding AB is currently generating about -0.1 per unit of risk. If you would invest 12,040 in Nordea Bank Abp on August 25, 2024 and sell it today you would earn a total of 190.00 from holding Nordea Bank Abp or generate 1.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.48% |
| Values | Daily Returns |
Nordea Bank Abp vs. RVRC Holding AB
Performance |
| Timeline |
| Nordea Bank Abp |
| RVRC Holding AB |
Nordea Bank and RVRC Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordea Bank and RVRC Holding
The main advantage of trading using opposite Nordea Bank and RVRC Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordea Bank position performs unexpectedly, RVRC Holding 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 RVRC Holding will offset losses from the drop in RVRC Holding's long position.| Nordea Bank vs. Skandinaviska Enskilda Banken | Nordea Bank vs. Skandinaviska Enskilda Banken | Nordea Bank vs. Swedbank AB | Nordea Bank vs. TF Bank AB |
| RVRC Holding vs. AstraZeneca PLC | RVRC Holding vs. Investor AB ser | RVRC Holding vs. Investor AB ser | RVRC Holding vs. Atlas Copco 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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