Correlation Between Nordea Bank and Nordinvestments

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

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

Diversification Opportunities for Nordea Bank and Nordinvestments

0.0

Correlation Coefficient

Nordea Bank  Nordinvestments

Pay attention - limited upside

The 3 months correlation between Nordea and Nordinvestments is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Nordea Bank Abp and Nordinvestments AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nordinvestments AS and Nordea 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 Nordea Bank Abp are associated (or correlated) with Nordinvestments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nordinvestments AS has no effect on the direction of Nordea Bank i.e., Nordea Bank and Nordinvestments go up and down completely randomly.

Pair Corralation between Nordea Bank and Nordinvestments

If you would invest  8,454  in Nordea Bank Abp on February 1, 2025 and sell it today you would earn a total of  782.00  from holding Nordea Bank Abp or generate 9.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

Nordea Bank Abp  vs.  Nordinvestments AS

Nordea Bank Abp

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Nordea Bank Abp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating basic indicators, Nordea Bank may actually be approaching a critical reversion point that can send shares even higher in June 2025.

Nordinvestments AS

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nordinvestments AS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Nordinvestments is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Nordea Bank and Nordinvestments

The main advantage of trading using opposite Nordea Bank and Nordinvestments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordea Bank position performs unexpectedly, Nordinvestments 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 Nordinvestments will offset losses from the drop in Nordinvestments' long position.

The idea behind Nordea Bank Abp and Nordinvestments AS 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.