Correlation Between Karnov Group and Nitro Games

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

By analyzing existing cross correlation between Karnov Group AB and Nitro Games Oyj, you can compare the effects of market volatilities on Karnov Group and Nitro Games 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 Karnov Group with a short position of Nitro Games. Check out your portfolio center. Please also check ongoing floating volatility patterns of Karnov Group and Nitro Games.

Diversification Opportunities for Karnov Group and Nitro Games

0.43

Correlation Coefficient

Karnov Group  Nitro Games

Very weak diversification

The 3 months correlation between Karnov and Nitro is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Karnov Group AB and Nitro Games Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nitro Games Oyj and Karnov Group 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 Karnov Group AB are associated (or correlated) with Nitro Games. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nitro Games Oyj has no effect on the direction of Karnov Group i.e., Karnov Group and Nitro Games go up and down completely randomly.

Pair Corralation between Karnov Group and Nitro Games

Assuming the 90 days trading horizon Karnov Group AB is expected to generate 0.32 times more return on investment than Nitro Games. However, Karnov Group AB is 3.12 times less risky than Nitro Games. It trades about 0.09 of its potential returns per unit of risk. Nitro Games Oyj is currently generating about -0.04 per unit of risk. If you would invest  8,130  in Karnov Group AB on December 1, 2024 and sell it today you would earn a total of  770.00  from holding Karnov Group AB or generate 9.47% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.33%
Values	Daily Returns

Karnov Group AB  vs.  Nitro Games Oyj

Karnov Group AB

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Karnov Group AB are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Karnov Group may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Nitro Games Oyj

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nitro Games Oyj has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Karnov Group and Nitro Games

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

The idea behind Karnov Group AB and Nitro Games Oyj 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.