Correlation Between I Tech and Nordea Bank
Can any of the company-specific risk be diversified away by investing in both I Tech 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 I Tech and Nordea Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between I Tech and Nordea Bank Abp, you can compare the effects of market volatilities on I Tech 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 I Tech with a short position of Nordea Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of I Tech and Nordea Bank.
Diversification Opportunities for I Tech and Nordea Bank
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between ITECH and Nordea is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding I Tech 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 I Tech 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 I Tech 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 I Tech i.e., I Tech and Nordea Bank go up and down completely randomly.
Pair Corralation between I Tech and Nordea Bank
Assuming the 90 days trading horizon I Tech is expected to generate 2.78 times more return on investment than Nordea Bank. However, I Tech is 2.78 times more volatile than Nordea Bank Abp. It trades about 0.05 of its potential returns per unit of risk. Nordea Bank Abp is currently generating about -0.1 per unit of risk. If you would invest 4,860 in I Tech on September 5, 2024 and sell it today you would earn a total of 120.00 from holding I Tech or generate 2.47% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
I Tech vs. Nordea Bank Abp
Performance |
Timeline |
I Tech |
Nordea Bank Abp |
I Tech and Nordea Bank Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with I Tech and Nordea Bank
The main advantage of trading using opposite I Tech and Nordea Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if I Tech 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.I Tech vs. Genovis AB | I Tech vs. Bonesupport Holding AB | I Tech vs. Enea AB | I Tech vs. Xvivo Perfusion AB |
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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