Correlation Between Nokia Oyj and Vienna Insurance
Can any of the company-specific risk be diversified away by investing in both Nokia Oyj and Vienna Insurance 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 Vienna Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nokia Oyj and Vienna Insurance Group, you can compare the effects of market volatilities on Nokia Oyj and Vienna Insurance 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 Vienna Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nokia Oyj and Vienna Insurance.
Diversification Opportunities for Nokia Oyj and Vienna Insurance
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nokia and Vienna is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Nokia Oyj and Vienna Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vienna Insurance 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 Vienna Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vienna Insurance has no effect on the direction of Nokia Oyj i.e., Nokia Oyj and Vienna Insurance go up and down completely randomly.
Pair Corralation between Nokia Oyj and Vienna Insurance
Assuming the 90 days trading horizon Nokia Oyj is expected to generate 1.88 times more return on investment than Vienna Insurance. However, Nokia Oyj is 1.88 times more volatile than Vienna Insurance Group. It trades about 0.09 of its potential returns per unit of risk. Vienna Insurance Group is currently generating about -0.05 per unit of risk. If you would invest 9,262 in Nokia Oyj on September 14, 2024 and sell it today you would earn a total of 838.00 from holding Nokia Oyj or generate 9.05% 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. Vienna Insurance Group
Performance |
Timeline |
Nokia Oyj |
Vienna Insurance |
Nokia Oyj and Vienna Insurance Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Nokia Oyj and Vienna Insurance
The main advantage of trading using opposite Nokia Oyj and Vienna Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nokia Oyj position performs unexpectedly, Vienna Insurance 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 Vienna Insurance will offset losses from the drop in Vienna Insurance's long position.Nokia Oyj vs. Vienna Insurance Group | Nokia Oyj vs. UNIQA Insurance Group | Nokia Oyj vs. Erste Group Bank | Nokia Oyj vs. Raiffeisen Bank International |
Vienna Insurance vs. Erste Group Bank | Vienna Insurance vs. Komercni Banka AS | Vienna Insurance vs. JT ARCH INVESTMENTS | Vienna Insurance vs. UNIQA Insurance Group |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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