Correlation Between Nasdaq and Nordea 1
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By analyzing existing cross correlation between Nasdaq Inc and Nordea 1 , you can compare the effects of market volatilities on Nasdaq and Nordea 1 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 Nasdaq with a short position of Nordea 1. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq and Nordea 1.
Diversification Opportunities for Nasdaq and Nordea 1
Very poor diversification
The 3 months correlation between Nasdaq and Nordea is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq Inc and Nordea 1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nordea 1 and Nasdaq 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 Nasdaq Inc are associated (or correlated) with Nordea 1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nordea 1 has no effect on the direction of Nasdaq i.e., Nasdaq and Nordea 1 go up and down completely randomly.
Pair Corralation between Nasdaq and Nordea 1
Given the investment horizon of 90 days Nasdaq is expected to generate 1.35 times less return on investment than Nordea 1. In addition to that, Nasdaq is 1.34 times more volatile than Nordea 1 . It trades about 0.07 of its total potential returns per unit of risk. Nordea 1 is currently generating about 0.13 per unit of volatility. If you would invest 38,023 in Nordea 1 on September 20, 2024 and sell it today you would earn a total of 2,527 from holding Nordea 1 or generate 6.65% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 98.44% |
Values | Daily Returns |
Nasdaq Inc vs. Nordea 1
Performance |
Timeline |
Nasdaq Inc |
Nordea 1 |
Nasdaq and Nordea 1 Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Nasdaq and Nordea 1
The main advantage of trading using opposite Nasdaq and Nordea 1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq position performs unexpectedly, Nordea 1 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 1 will offset losses from the drop in Nordea 1's long position.The idea behind Nasdaq Inc and Nordea 1 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.Nordea 1 vs. KLP AksjeNorge Indeks | Nordea 1 vs. Franklin Floating Rate | Nordea 1 vs. Nordnet One Forsiktig | Nordea 1 vs. DNB Norge Selektiv |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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