Correlation Between Nanoform Finland and Kamux Suomi

Can any of the company-specific risk be diversified away by investing in both Nanoform Finland and Kamux Suomi 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 Nanoform Finland and Kamux Suomi into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Nanoform Finland Plc and Kamux Suomi Oy, you can compare the effects of market volatilities on Nanoform Finland and Kamux Suomi 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 Nanoform Finland with a short position of Kamux Suomi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nanoform Finland and Kamux Suomi.

Diversification Opportunities for Nanoform Finland and Kamux Suomi

0.25

Correlation Coefficient

Nanoform Finland  Kamux Suomi

Modest diversification

The 3 months correlation between Nanoform and Kamux is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Nanoform Finland Plc and Kamux Suomi Oy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kamux Suomi Oy and Nanoform Finland 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 Nanoform Finland Plc are associated (or correlated) with Kamux Suomi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kamux Suomi Oy has no effect on the direction of Nanoform Finland i.e., Nanoform Finland and Kamux Suomi go up and down completely randomly.

Pair Corralation between Nanoform Finland and Kamux Suomi

Assuming the 90 days trading horizon Nanoform Finland is expected to generate 2.62 times less return on investment than Kamux Suomi. In addition to that, Nanoform Finland is 1.84 times more volatile than Kamux Suomi Oy. It trades about 0.08 of its total potential returns per unit of risk. Kamux Suomi Oy is currently generating about 0.36 per unit of volatility. If you would invest  250.00  in Kamux Suomi Oy on October 24, 2024 and sell it today you would earn a total of  34.00  from holding Kamux Suomi Oy or generate 13.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	94.12%
Values	Daily Returns

Nanoform Finland Plc  vs.  Kamux Suomi Oy

Nanoform Finland Plc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nanoform Finland Plc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Kamux Suomi Oy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kamux Suomi Oy has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical indicators remain fairly strong which may send shares a bit higher in February 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Nanoform Finland and Kamux Suomi

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

The idea behind Nanoform Finland Plc and Kamux Suomi Oy 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.

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 Global Correlations module to find global opportunities by holding instruments from different markets.