Correlation Between Nordea Bank and First Hawaiian
Can any of the company-specific risk be diversified away by investing in both Nordea Bank and First Hawaiian 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 First Hawaiian 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 First Hawaiian, you can compare the effects of market volatilities on Nordea Bank and First Hawaiian 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 First Hawaiian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordea Bank and First Hawaiian.
Diversification Opportunities for Nordea Bank and First Hawaiian
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nordea and First is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Nordea Bank Abp and First Hawaiian in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Hawaiian 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 First Hawaiian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Hawaiian has no effect on the direction of Nordea Bank i.e., Nordea Bank and First Hawaiian go up and down completely randomly.
Pair Corralation between Nordea Bank and First Hawaiian
Assuming the 90 days horizon Nordea Bank Abp is expected to under-perform the First Hawaiian. But the pink sheet apears to be less risky and, when comparing its historical volatility, Nordea Bank Abp is 2.61 times less risky than First Hawaiian. The pink sheet trades about -0.29 of its potential returns per unit of risk. The First Hawaiian is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 2,479 in First Hawaiian on September 4, 2024 and sell it today you would earn a total of 261.00 from holding First Hawaiian or generate 10.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Nordea Bank Abp vs. First Hawaiian
Performance |
| Timeline |
| Nordea Bank Abp |
| First Hawaiian |
Nordea Bank and First Hawaiian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordea Bank and First Hawaiian
The main advantage of trading using opposite Nordea Bank and First Hawaiian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordea Bank position performs unexpectedly, First Hawaiian 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 First Hawaiian will offset losses from the drop in First Hawaiian's long position.| Nordea Bank vs. United Overseas Bank | Nordea Bank vs. KBC Groep NV | Nordea Bank vs. Bank Mandiri Persero | Nordea Bank vs. Overseas Chinese Banking |
| First Hawaiian vs. Territorial Bancorp | First Hawaiian vs. Bank of Hawaii | First Hawaiian vs. Financial Institutions | First Hawaiian vs. Heritage Financial |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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