Correlation Between Nordea Bank and Zwipe AS
Can any of the company-specific risk be diversified away by investing in both Nordea Bank and Zwipe AS 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 Zwipe AS 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 Zwipe AS, you can compare the effects of market volatilities on Nordea Bank and Zwipe AS 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 Zwipe AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordea Bank and Zwipe AS.
Diversification Opportunities for Nordea Bank and Zwipe AS
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nordea and Zwipe is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Nordea Bank Abp and Zwipe AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zwipe AS 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 Zwipe AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zwipe AS has no effect on the direction of Nordea Bank i.e., Nordea Bank and Zwipe AS go up and down completely randomly.
Pair Corralation between Nordea Bank and Zwipe AS
Assuming the 90 days trading horizon Nordea Bank Abp is expected to generate 0.13 times more return on investment than Zwipe AS. However, Nordea Bank Abp is 7.48 times less risky than Zwipe AS. It trades about -0.06 of its potential returns per unit of risk. Zwipe AS is currently generating about -0.36 per unit of risk. If you would invest 12,415 in Nordea Bank Abp on August 26, 2024 and sell it today you would lose (185.00) from holding Nordea Bank Abp or give up 1.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nordea Bank Abp vs. Zwipe AS
Performance |
| Timeline |
| Nordea Bank Abp |
| Zwipe AS |
Nordea Bank and Zwipe AS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordea Bank and Zwipe AS
The main advantage of trading using opposite Nordea Bank and Zwipe AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordea Bank position performs unexpectedly, Zwipe AS 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 Zwipe AS will offset losses from the drop in Zwipe AS'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 |
| Zwipe AS vs. AstraZeneca PLC | Zwipe AS vs. Investor AB ser | Zwipe AS vs. Investor AB ser | Zwipe AS 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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