Correlation Between Spinnova and Nanoform Finland

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

By analyzing existing cross correlation between Spinnova Oy and Nanoform Finland Plc, you can compare the effects of market volatilities on Spinnova and Nanoform Finland 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 Spinnova with a short position of Nanoform Finland. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spinnova and Nanoform Finland.

Diversification Opportunities for Spinnova and Nanoform Finland

0.57

Correlation Coefficient

Spinnova  Nanoform Finland

Very weak diversification

The 3 months correlation between Spinnova and Nanoform is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Spinnova Oy and Nanoform Finland Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nanoform Finland Plc and Spinnova 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 Spinnova Oy are associated (or correlated) with Nanoform Finland. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nanoform Finland Plc has no effect on the direction of Spinnova i.e., Spinnova and Nanoform Finland go up and down completely randomly.

Pair Corralation between Spinnova and Nanoform Finland

Assuming the 90 days trading horizon Spinnova Oy is expected to under-perform the Nanoform Finland. In addition to that, Spinnova is 1.8 times more volatile than Nanoform Finland Plc. It trades about -0.11 of its total potential returns per unit of risk. Nanoform Finland Plc is currently generating about -0.02 per unit of volatility. If you would invest  127.00  in Nanoform Finland Plc on December 25, 2024 and sell it today you would lose (10.00) from holding Nanoform Finland Plc or give up 7.87% of portfolio value over 90 days.

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

Spinnova Oy  vs.  Nanoform Finland Plc

Spinnova Oy

Risk-Adjusted Performance

Very Weak

Over the last 90 days Spinnova Oy has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Nanoform Finland Plc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nanoform Finland Plc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Nanoform Finland is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Spinnova and Nanoform Finland

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

The idea behind Spinnova Oy and Nanoform Finland Plc 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.