Correlation Between BankInvest Select and Nordea Bank

Can any of the company-specific risk be diversified away by investing in both BankInvest Select 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 BankInvest Select and Nordea Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BankInvest Select Small and Nordea Bank Abp, you can compare the effects of market volatilities on BankInvest Select 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 BankInvest Select with a short position of Nordea Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of BankInvest Select and Nordea Bank.

Diversification Opportunities for BankInvest Select and Nordea Bank

0.0

Correlation Coefficient

BankInvest Select  Nordea Bank

Pay attention - limited upside

The 3 months correlation between BankInvest and Nordea is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding BankInvest Select Small 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 BankInvest Select 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 BankInvest Select Small 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 BankInvest Select i.e., BankInvest Select and Nordea Bank go up and down completely randomly.

Pair Corralation between BankInvest Select and Nordea Bank

If you would invest  6,939  in Nordea Bank Abp on February 26, 2024 and sell it today you would earn a total of  1,471  from holding Nordea Bank Abp or generate 21.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

BankInvest Select Small  vs.  Nordea Bank Abp

BankInvest Select Small

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days BankInvest Select Small has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound primary indicators, BankInvest Select is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Nordea Bank Abp

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Nordea Bank Abp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental indicators, Nordea Bank is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with BankInvest Select and Nordea Bank

The main advantage of trading using opposite BankInvest Select and Nordea Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BankInvest Select 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.

The idea behind BankInvest Select Small and Nordea Bank Abp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.