Correlation Between Qleanair Holding and Nitro Games

Can any of the company-specific risk be diversified away by investing in both Qleanair Holding and Nitro Games 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 Qleanair Holding and Nitro Games into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Qleanair Holding AB and Nitro Games Oyj, you can compare the effects of market volatilities on Qleanair Holding and Nitro Games 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 Qleanair Holding with a short position of Nitro Games. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qleanair Holding and Nitro Games.

Diversification Opportunities for Qleanair Holding and Nitro Games

0.05

Correlation Coefficient

Qleanair Holding  Nitro Games

Significant diversification

The 3 months correlation between Qleanair and Nitro is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Qleanair Holding AB and Nitro Games Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nitro Games Oyj and Qleanair Holding 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 Qleanair Holding AB are associated (or correlated) with Nitro Games. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nitro Games Oyj has no effect on the direction of Qleanair Holding i.e., Qleanair Holding and Nitro Games go up and down completely randomly.

Pair Corralation between Qleanair Holding and Nitro Games

Assuming the 90 days trading horizon Qleanair Holding AB is expected to under-perform the Nitro Games. But the stock apears to be less risky and, when comparing its historical volatility, Qleanair Holding AB is 1.93 times less risky than Nitro Games. The stock trades about -0.26 of its potential returns per unit of risk. The Nitro Games Oyj is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  280.00  in Nitro Games Oyj on September 1, 2024 and sell it today you would lose (14.00) from holding Nitro Games Oyj or give up 5.0% of portfolio value over 90 days.

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

Qleanair Holding AB  vs.  Nitro Games Oyj

Qleanair Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Qleanair Holding AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in December 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Nitro Games Oyj

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nitro Games Oyj has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Nitro Games is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Qleanair Holding and Nitro Games

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

The idea behind Qleanair Holding AB and Nitro Games Oyj 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.