Correlation Between Clearfield and Nokia Corp
Can any of the company-specific risk be diversified away by investing in both Clearfield and Nokia Corp 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 Clearfield and Nokia Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Clearfield and Nokia Corp ADR, you can compare the effects of market volatilities on Clearfield and Nokia Corp 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 Clearfield with a short position of Nokia Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clearfield and Nokia Corp.
Diversification Opportunities for Clearfield and Nokia Corp
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Clearfield and Nokia is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Clearfield and Nokia Corp ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nokia Corp ADR and Clearfield 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 Clearfield are associated (or correlated) with Nokia Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nokia Corp ADR has no effect on the direction of Clearfield i.e., Clearfield and Nokia Corp go up and down completely randomly.
Pair Corralation between Clearfield and Nokia Corp
Given the investment horizon of 90 days Clearfield is expected to under-perform the Nokia Corp. In addition to that, Clearfield is 1.48 times more volatile than Nokia Corp ADR. It trades about 0.0 of its total potential returns per unit of risk. Nokia Corp ADR is currently generating about 0.05 per unit of volatility. If you would invest 435.00 in Nokia Corp ADR on November 2, 2024 and sell it today you would earn a total of 35.00 from holding Nokia Corp ADR or generate 8.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Clearfield vs. Nokia Corp ADR
Performance |
| Timeline |
| Clearfield |
| Nokia Corp ADR |
Clearfield and Nokia Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clearfield and Nokia Corp
The main advantage of trading using opposite Clearfield and Nokia Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clearfield position performs unexpectedly, Nokia Corp 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 Corp will offset losses from the drop in Nokia Corp's long position.| Clearfield vs. Comtech Telecommunications Corp | Clearfield vs. Knowles Cor | Clearfield vs. Extreme Networks | Clearfield vs. KVH Industries |
| Nokia Corp vs. Hewlett Packard Enterprise | Nokia Corp vs. Juniper Networks | Nokia Corp vs. Ciena Corp | Nokia Corp vs. Motorola Solutions |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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