Correlation Between Xeros Technology and Nordea Bank
Can any of the company-specific risk be diversified away by investing in both Xeros Technology 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 Xeros Technology and Nordea Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xeros Technology Group and Nordea Bank Abp, you can compare the effects of market volatilities on Xeros Technology 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 Xeros Technology with a short position of Nordea Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xeros Technology and Nordea Bank.
Diversification Opportunities for Xeros Technology and Nordea Bank
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Xeros and Nordea is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Xeros Technology Group 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 Xeros Technology 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 Xeros Technology Group 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 Xeros Technology i.e., Xeros Technology and Nordea Bank go up and down completely randomly.
Pair Corralation between Xeros Technology and Nordea Bank
Assuming the 90 days trading horizon Xeros Technology Group is expected to generate 7.03 times more return on investment than Nordea Bank. However, Xeros Technology is 7.03 times more volatile than Nordea Bank Abp. It trades about 0.27 of its potential returns per unit of risk. Nordea Bank Abp is currently generating about 0.57 per unit of risk. If you would invest 38.00 in Xeros Technology Group on October 28, 2024 and sell it today you would earn a total of 15.00 from holding Xeros Technology Group or generate 39.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xeros Technology Group vs. Nordea Bank Abp
Performance |
| Timeline |
| Xeros Technology |
| Nordea Bank Abp |
Xeros Technology and Nordea Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xeros Technology and Nordea Bank
The main advantage of trading using opposite Xeros Technology and Nordea Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xeros Technology 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.| Xeros Technology vs. Monks Investment Trust | Xeros Technology vs. Polar Capital Technology | Xeros Technology vs. Herald Investment Trust | Xeros Technology vs. Vietnam Enterprise Investments |
| Nordea Bank vs. Various Eateries PLC | Nordea Bank vs. SoftBank Group Corp | Nordea Bank vs. Intermediate Capital Group | Nordea Bank vs. Catalyst Media Group |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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