Correlation Between AKKO Invest and NordTelekom Telecommunicatio

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

By analyzing existing cross correlation between AKKO Invest Nyrt and NordTelekom Telecommunications Service, you can compare the effects of market volatilities on AKKO Invest and NordTelekom Telecommunicatio 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 AKKO Invest with a short position of NordTelekom Telecommunicatio. Check out your portfolio center. Please also check ongoing floating volatility patterns of AKKO Invest and NordTelekom Telecommunicatio.

Diversification Opportunities for AKKO Invest and NordTelekom Telecommunicatio

-0.5

Correlation Coefficient

AKKO Invest  NordTelekom Telecommunicatio

Very good diversification

The 3 months correlation between AKKO and NordTelekom is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding AKKO Invest Nyrt and NordTelekom Telecommunications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NordTelekom Telecommunicatio and AKKO Invest 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 AKKO Invest Nyrt are associated (or correlated) with NordTelekom Telecommunicatio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NordTelekom Telecommunicatio has no effect on the direction of AKKO Invest i.e., AKKO Invest and NordTelekom Telecommunicatio go up and down completely randomly.

Pair Corralation between AKKO Invest and NordTelekom Telecommunicatio

Assuming the 90 days trading horizon AKKO Invest Nyrt is expected to under-perform the NordTelekom Telecommunicatio. But the stock apears to be less risky and, when comparing its historical volatility, AKKO Invest Nyrt is 2.43 times less risky than NordTelekom Telecommunicatio. The stock trades about -0.07 of its potential returns per unit of risk. The NordTelekom Telecommunications Service is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  1,250  in NordTelekom Telecommunications Service on September 15, 2024 and sell it today you would lose (20.00) from holding NordTelekom Telecommunications Service or give up 1.6% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	90.91%
Values	Daily Returns

AKKO Invest Nyrt  vs.  NordTelekom Telecommunications

AKKO Invest Nyrt

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in AKKO Invest Nyrt are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, AKKO Invest unveiled solid returns over the last few months and may actually be approaching a breakup point.

NordTelekom Telecommunicatio

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NordTelekom Telecommunications Service has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with AKKO Invest and NordTelekom Telecommunicatio

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

The idea behind AKKO Invest Nyrt and NordTelekom Telecommunications Service 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.