Correlation Between Nordfyns Bank and Carnegie Wealth
Can any of the company-specific risk be diversified away by investing in both Nordfyns Bank and Carnegie Wealth 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 Nordfyns Bank and Carnegie Wealth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nordfyns Bank AS and Carnegie Wealth Management, you can compare the effects of market volatilities on Nordfyns Bank and Carnegie Wealth 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 Nordfyns Bank with a short position of Carnegie Wealth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordfyns Bank and Carnegie Wealth.
Diversification Opportunities for Nordfyns Bank and Carnegie Wealth
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nordfyns and Carnegie is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Nordfyns Bank AS and Carnegie Wealth Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carnegie Wealth Mana and Nordfyns 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 Nordfyns Bank AS are associated (or correlated) with Carnegie Wealth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carnegie Wealth Mana has no effect on the direction of Nordfyns Bank i.e., Nordfyns Bank and Carnegie Wealth go up and down completely randomly.
Pair Corralation between Nordfyns Bank and Carnegie Wealth
Assuming the 90 days trading horizon Nordfyns Bank AS is expected to under-perform the Carnegie Wealth. But the stock apears to be less risky and, when comparing its historical volatility, Nordfyns Bank AS is 1.55 times less risky than Carnegie Wealth. The stock trades about -0.33 of its potential returns per unit of risk. The Carnegie Wealth Management is currently generating about -0.13 of returns per unit of risk over similar time horizon. If you would invest 12,990 in Carnegie Wealth Management on August 27, 2024 and sell it today you would lose (385.00) from holding Carnegie Wealth Management or give up 2.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nordfyns Bank AS vs. Carnegie Wealth Management
Performance |
| Timeline |
| Nordfyns Bank AS |
| Carnegie Wealth Mana |
Nordfyns Bank and Carnegie Wealth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordfyns Bank and Carnegie Wealth
The main advantage of trading using opposite Nordfyns Bank and Carnegie Wealth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordfyns Bank position performs unexpectedly, Carnegie Wealth 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 Carnegie Wealth will offset losses from the drop in Carnegie Wealth's long position.| Nordfyns Bank vs. Dataproces Group AS | Nordfyns Bank vs. cBrain AS | Nordfyns Bank vs. ALK Abell AS | Nordfyns Bank vs. ChemoMetec AS |
| Carnegie Wealth vs. Novo Nordisk AS | Carnegie Wealth vs. Nordea Bank Abp | Carnegie Wealth vs. DSV Panalpina AS | Carnegie Wealth vs. AP Mller |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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