Correlation Between United Overseas and Nordea Bank
Can any of the company-specific risk be diversified away by investing in both United Overseas 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 United Overseas and Nordea Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Overseas Bank and Nordea Bank Abp, you can compare the effects of market volatilities on United Overseas 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 United Overseas with a short position of Nordea Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Overseas and Nordea Bank.
Diversification Opportunities for United Overseas and Nordea Bank
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between United and Nordea is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding United Overseas Bank 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 United Overseas 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 United Overseas Bank 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 United Overseas i.e., United Overseas and Nordea Bank go up and down completely randomly.
Pair Corralation between United Overseas and Nordea Bank
Assuming the 90 days horizon United Overseas Bank is expected to generate 1.56 times more return on investment than Nordea Bank. However, United Overseas is 1.56 times more volatile than Nordea Bank Abp. It trades about 0.24 of its potential returns per unit of risk. Nordea Bank Abp is currently generating about -0.23 per unit of risk. If you would invest 4,916 in United Overseas Bank on August 29, 2024 and sell it today you would earn a total of 467.00 from holding United Overseas Bank or generate 9.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
United Overseas Bank vs. Nordea Bank Abp
Performance |
| Timeline |
| United Overseas Bank |
| Nordea Bank Abp |
United Overseas and Nordea Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Overseas and Nordea Bank
The main advantage of trading using opposite United Overseas and Nordea Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Overseas 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.| United Overseas vs. KBC Groep NV | United Overseas vs. DBS Group Holdings | United Overseas vs. HomeStreet | United Overseas vs. Bank of Hawaii |
| Nordea Bank vs. Israel Discount Bank | Nordea Bank vs. Baraboo Bancorporation | Nordea Bank vs. Danske Bank AS | Nordea Bank vs. Jyske Bank AS |
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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |