Correlation Between Nexstim Oyj and Purmo Group
Can any of the company-specific risk be diversified away by investing in both Nexstim Oyj and Purmo Group 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 Nexstim Oyj and Purmo Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nexstim Oyj and Purmo Group Oyj, you can compare the effects of market volatilities on Nexstim Oyj and Purmo Group 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 Nexstim Oyj with a short position of Purmo Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nexstim Oyj and Purmo Group.
Diversification Opportunities for Nexstim Oyj and Purmo Group
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nexstim and Purmo is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Nexstim Oyj and Purmo Group Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Purmo Group Oyj and Nexstim 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 Nexstim Oyj are associated (or correlated) with Purmo Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Purmo Group Oyj has no effect on the direction of Nexstim Oyj i.e., Nexstim Oyj and Purmo Group go up and down completely randomly.
Pair Corralation between Nexstim Oyj and Purmo Group
Assuming the 90 days trading horizon Nexstim Oyj is expected to generate 9.18 times more return on investment than Purmo Group. However, Nexstim Oyj is 9.18 times more volatile than Purmo Group Oyj. It trades about 0.39 of its potential returns per unit of risk. Purmo Group Oyj is currently generating about 0.14 per unit of risk. If you would invest 618.00 in Nexstim Oyj on October 5, 2024 and sell it today you would earn a total of 232.00 from holding Nexstim Oyj or generate 37.54% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Nexstim Oyj vs. Purmo Group Oyj
Performance |
Timeline |
Nexstim Oyj |
Purmo Group Oyj |
Nexstim Oyj and Purmo Group Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Nexstim Oyj and Purmo Group
The main advantage of trading using opposite Nexstim Oyj and Purmo Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nexstim Oyj position performs unexpectedly, Purmo Group 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 Purmo Group will offset losses from the drop in Purmo Group's long position.Nexstim Oyj vs. Vaisala Oyj A | Nexstim Oyj vs. Nokian Renkaat Oyj | Nexstim Oyj vs. CapMan Oyj B | Nexstim Oyj vs. HKFoods Oyj A |
Purmo Group vs. Vaisala Oyj A | Purmo Group vs. Nokian Renkaat Oyj | Purmo Group vs. CapMan Oyj B | Purmo Group vs. HKFoods Oyj A |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |