Correlation Between Kone Oyj and Nuscale Power

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

By analyzing existing cross correlation between Kone Oyj ADR and Nuscale Power Corp, you can compare the effects of market volatilities on Kone Oyj and Nuscale Power 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 Kone Oyj with a short position of Nuscale Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kone Oyj and Nuscale Power.

Diversification Opportunities for Kone Oyj and Nuscale Power

-0.5

Correlation Coefficient

Kone Oyj  Nuscale Power

Very good diversification

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

Pair Corralation between Kone Oyj and Nuscale Power

Assuming the 90 days horizon Kone Oyj ADR is expected to generate 0.18 times more return on investment than Nuscale Power. However, Kone Oyj ADR is 5.68 times less risky than Nuscale Power. It trades about 0.17 of its potential returns per unit of risk. Nuscale Power Corp is currently generating about 0.01 per unit of risk. If you would invest  2,442  in Kone Oyj ADR on December 28, 2024 and sell it today you would earn a total of  350.00  from holding Kone Oyj ADR or generate 14.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Kone Oyj ADR  vs.  Nuscale Power Corp

Kone Oyj ADR

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Kone Oyj ADR are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady forward-looking indicators, Kone Oyj showed solid returns over the last few months and may actually be approaching a breakup point.

Nuscale Power Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Nuscale Power Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent primary indicators, Nuscale Power may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Kone Oyj and Nuscale Power

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

The idea behind Kone Oyj ADR and Nuscale Power Corp 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.