Correlation Between Enphase Energy, and Nokia
Can any of the company-specific risk be diversified away by investing in both Enphase Energy, 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 Enphase Energy, and Nokia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enphase Energy, and Nokia, you can compare the effects of market volatilities on Enphase Energy, 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 Enphase Energy, with a short position of Nokia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enphase Energy, and Nokia.
Diversification Opportunities for Enphase Energy, and Nokia
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Enphase and Nokia is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Enphase Energy, and Nokia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nokia and Enphase Energy, 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 Enphase Energy, 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 Enphase Energy, i.e., Enphase Energy, and Nokia go up and down completely randomly.
Pair Corralation between Enphase Energy, and Nokia
Assuming the 90 days trading horizon Enphase Energy, is expected to under-perform the Nokia. In addition to that, Enphase Energy, is 1.8 times more volatile than Nokia. It trades about -0.17 of its total potential returns per unit of risk. Nokia is currently generating about 0.01 per unit of volatility. If you would invest 8,542 in Nokia on August 30, 2024 and sell it today you would lose (42.00) from holding Nokia or give up 0.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enphase Energy, vs. Nokia
Performance |
| Timeline |
| Enphase Energy, |
| Nokia |
Enphase Energy, and Nokia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enphase Energy, and Nokia
The main advantage of trading using opposite Enphase Energy, and Nokia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enphase Energy, 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.| Enphase Energy, vs. Capital One Financial | Enphase Energy, vs. Micron Technology | Enphase Energy, vs. First Republic Bank | Enphase Energy, vs. The Bank of |
| Nokia vs. McEwen Mining | Nokia vs. Taiwan Semiconductor Manufacturing | Nokia vs. Verizon Communications | Nokia vs. Costco Wholesale |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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