Correlation Between State Bank and Nordea Bank
Can any of the company-specific risk be diversified away by investing in both State Bank and Nordea Bank 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 State Bank and Nordea Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between State Bank of and Nordea Bank Abp, you can compare the effects of market volatilities on State Bank and Nordea Bank 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 State Bank with a short position of Nordea Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of State Bank and Nordea Bank.
Diversification Opportunities for State Bank and Nordea Bank
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between State and Nordea is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding State Bank of and Nordea Bank Abp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nordea Bank Abp and State 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 State Bank of are associated (or correlated) with Nordea Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nordea Bank Abp has no effect on the direction of State Bank i.e., State Bank and Nordea Bank go up and down completely randomly.
Pair Corralation between State Bank and Nordea Bank
Assuming the 90 days trading horizon State Bank of is expected to under-perform the Nordea Bank. In addition to that, State Bank is 1.52 times more volatile than Nordea Bank Abp. It trades about -0.06 of its total potential returns per unit of risk. Nordea Bank Abp is currently generating about 0.36 per unit of volatility. If you would invest 12,280 in Nordea Bank Abp on November 5, 2024 and sell it today you would earn a total of 930.00 from holding Nordea Bank Abp or generate 7.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
State Bank of vs. Nordea Bank Abp
Performance |
| Timeline |
| State Bank |
| Nordea Bank Abp |
State Bank and Nordea Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with State Bank and Nordea Bank
The main advantage of trading using opposite State Bank and Nordea Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if State Bank position performs unexpectedly, Nordea Bank 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 Nordea Bank will offset losses from the drop in Nordea Bank's long position.| State Bank vs. Bisichi Mining PLC | State Bank vs. Broadcom | State Bank vs. Atalaya Mining | State Bank vs. Fortuna Silver Mines |
| Nordea Bank vs. GoldMining | Nordea Bank vs. Foresight Environmental Infrastructure | Nordea Bank vs. Iron Mountain | Nordea Bank vs. Eastinco Mining Exploration |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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