Correlation Between MYFAIR GOLD and Nokia
Can any of the company-specific risk be diversified away by investing in both MYFAIR GOLD and Nokia 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 MYFAIR GOLD and Nokia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MYFAIR GOLD P and Nokia, you can compare the effects of market volatilities on MYFAIR GOLD and Nokia 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 MYFAIR GOLD with a short position of Nokia. Check out your portfolio center. Please also check ongoing floating volatility patterns of MYFAIR GOLD and Nokia.
Diversification Opportunities for MYFAIR GOLD and Nokia
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between MYFAIR and Nokia is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding MYFAIR GOLD P and Nokia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nokia and MYFAIR GOLD 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 MYFAIR GOLD P are associated (or correlated) with Nokia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nokia has no effect on the direction of MYFAIR GOLD i.e., MYFAIR GOLD and Nokia go up and down completely randomly.
Pair Corralation between MYFAIR GOLD and Nokia
Assuming the 90 days horizon MYFAIR GOLD P is expected to under-perform the Nokia. In addition to that, MYFAIR GOLD is 1.72 times more volatile than Nokia. It trades about -0.02 of its total potential returns per unit of risk. Nokia is currently generating about 0.07 per unit of volatility. If you would invest 315.00 in Nokia on September 14, 2024 and sell it today you would earn a total of 103.00 from holding Nokia or generate 32.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MYFAIR GOLD P vs. Nokia
Performance |
| Timeline |
| MYFAIR GOLD P |
| Nokia |
MYFAIR GOLD and Nokia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MYFAIR GOLD and Nokia
The main advantage of trading using opposite MYFAIR GOLD and Nokia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MYFAIR GOLD position performs unexpectedly, Nokia 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 Nokia will offset losses from the drop in Nokia's long position.| MYFAIR GOLD vs. Franco Nevada | MYFAIR GOLD vs. Superior Plus Corp | MYFAIR GOLD vs. SIVERS SEMICONDUCTORS AB | MYFAIR GOLD vs. Norsk Hydro ASA |
| Nokia vs. Wizz Air Holdings | Nokia vs. MGIC INVESTMENT | Nokia vs. REGAL ASIAN INVESTMENTS | Nokia vs. MYFAIR GOLD P |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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