Correlation Between Cez AS and Nokia Oyj
Can any of the company-specific risk be diversified away by investing in both Cez AS and Nokia Oyj 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 Cez AS and Nokia Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cez AS and Nokia Oyj, you can compare the effects of market volatilities on Cez AS and Nokia Oyj 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 Cez AS with a short position of Nokia Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cez AS and Nokia Oyj.
Diversification Opportunities for Cez AS and Nokia Oyj
Very weak diversification
The 3 months correlation between Cez and Nokia is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Cez AS and Nokia Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nokia Oyj and Cez AS 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 Cez AS are associated (or correlated) with Nokia Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nokia Oyj has no effect on the direction of Cez AS i.e., Cez AS and Nokia Oyj go up and down completely randomly.
Pair Corralation between Cez AS and Nokia Oyj
Assuming the 90 days trading horizon Cez AS is expected to generate 0.72 times more return on investment than Nokia Oyj. However, Cez AS is 1.38 times less risky than Nokia Oyj. It trades about 0.08 of its potential returns per unit of risk. Nokia Oyj is currently generating about -0.01 per unit of risk. If you would invest 60,759 in Cez AS on August 28, 2024 and sell it today you would earn a total of 35,741 from holding Cez AS or generate 58.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cez AS vs. Nokia Oyj
Performance |
| Timeline |
| Cez AS |
| Nokia Oyj |
Cez AS and Nokia Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cez AS and Nokia Oyj
The main advantage of trading using opposite Cez AS and Nokia Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cez AS position performs unexpectedly, Nokia Oyj 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 Oyj will offset losses from the drop in Nokia Oyj's long position.| Cez AS vs. Komercni Banka AS | Cez AS vs. Moneta Money Bank | Cez AS vs. Erste Group Bank | Cez AS vs. Colt CZ Group |
| Nokia Oyj vs. Raiffeisen Bank International | Nokia Oyj vs. JT ARCH INVESTMENTS | Nokia Oyj vs. Moneta Money Bank | Nokia Oyj 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
Other Complementary Tools
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |