Correlation Between Nokia Oyj and Elecster Oyj
Can any of the company-specific risk be diversified away by investing in both Nokia Oyj and Elecster 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 Nokia Oyj and Elecster Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nokia Oyj and Elecster Oyj A, you can compare the effects of market volatilities on Nokia Oyj and Elecster 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 Nokia Oyj with a short position of Elecster Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nokia Oyj and Elecster Oyj.
Diversification Opportunities for Nokia Oyj and Elecster Oyj
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nokia and Elecster is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Nokia Oyj and Elecster Oyj A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elecster Oyj A and Nokia 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 Nokia Oyj are associated (or correlated) with Elecster Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elecster Oyj A has no effect on the direction of Nokia Oyj i.e., Nokia Oyj and Elecster Oyj go up and down completely randomly.
Pair Corralation between Nokia Oyj and Elecster Oyj
Assuming the 90 days trading horizon Nokia Oyj is expected to generate 0.53 times more return on investment than Elecster Oyj. However, Nokia Oyj is 1.89 times less risky than Elecster Oyj. It trades about 0.02 of its potential returns per unit of risk. Elecster Oyj A is currently generating about -0.11 per unit of risk. If you would invest 440.00 in Nokia Oyj on October 24, 2024 and sell it today you would earn a total of 5.00 from holding Nokia Oyj or generate 1.14% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Nokia Oyj vs. Elecster Oyj A
Performance |
Timeline |
Nokia Oyj |
Elecster Oyj A |
Nokia Oyj and Elecster Oyj Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Nokia Oyj and Elecster Oyj
The main advantage of trading using opposite Nokia Oyj and Elecster Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nokia Oyj position performs unexpectedly, Elecster 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 Elecster Oyj will offset losses from the drop in Elecster Oyj's long position.Nokia Oyj vs. Fortum Oyj | Nokia Oyj vs. Nordea Bank Abp | Nokia Oyj vs. Sampo Oyj A | Nokia Oyj vs. Neste Oil Oyj |
Elecster Oyj vs. Raute Oyj | Elecster Oyj vs. Honkarakenne Oyj B | Elecster Oyj vs. Wulff Yhtiot Oy | Elecster Oyj vs. Biohit Oyj B |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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