Correlation Between Nurminen Logistics and Tulikivi Oyj

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

By analyzing existing cross correlation between Nurminen Logistics Oyj and Tulikivi Oyj A, you can compare the effects of market volatilities on Nurminen Logistics and Tulikivi Oyj 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 Nurminen Logistics with a short position of Tulikivi Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nurminen Logistics and Tulikivi Oyj.

Diversification Opportunities for Nurminen Logistics and Tulikivi Oyj

-0.62

Correlation Coefficient

Nurminen Logistics  Tulikivi Oyj

Excellent diversification

The 3 months correlation between Nurminen and Tulikivi is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Nurminen Logistics Oyj and Tulikivi Oyj A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tulikivi Oyj A and Nurminen Logistics 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 Nurminen Logistics Oyj are associated (or correlated) with Tulikivi Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tulikivi Oyj A has no effect on the direction of Nurminen Logistics i.e., Nurminen Logistics and Tulikivi Oyj go up and down completely randomly.

Pair Corralation between Nurminen Logistics and Tulikivi Oyj

Assuming the 90 days trading horizon Nurminen Logistics Oyj is expected to generate 0.95 times more return on investment than Tulikivi Oyj. However, Nurminen Logistics Oyj is 1.05 times less risky than Tulikivi Oyj. It trades about 0.29 of its potential returns per unit of risk. Tulikivi Oyj A is currently generating about -0.06 per unit of risk. If you would invest  76.00  in Nurminen Logistics Oyj on October 23, 2024 and sell it today you would earn a total of  38.00  from holding Nurminen Logistics Oyj or generate 50.0% return on investment over 90 days.

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

Nurminen Logistics Oyj  vs.  Tulikivi Oyj A

Nurminen Logistics Oyj

Risk-Adjusted Performance

23 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Nurminen Logistics Oyj are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent technical indicators, Nurminen Logistics demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Tulikivi Oyj A

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tulikivi Oyj A has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's technical indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with Nurminen Logistics and Tulikivi Oyj

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

The idea behind Nurminen Logistics Oyj and Tulikivi Oyj A 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..