Correlation Between Getlink SE and Nokia Oyj
Can any of the company-specific risk be diversified away by investing in both Getlink SE 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 Getlink SE and Nokia Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Getlink SE and Nokia Oyj, you can compare the effects of market volatilities on Getlink SE 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 Getlink SE with a short position of Nokia Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Getlink SE and Nokia Oyj.
Diversification Opportunities for Getlink SE and Nokia Oyj
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Getlink and Nokia is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Getlink SE and Nokia Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nokia Oyj and Getlink SE 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 Getlink SE 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 Getlink SE i.e., Getlink SE and Nokia Oyj go up and down completely randomly.
Pair Corralation between Getlink SE and Nokia Oyj
Assuming the 90 days trading horizon Getlink SE is expected to generate 0.6 times more return on investment than Nokia Oyj. However, Getlink SE is 1.65 times less risky than Nokia Oyj. It trades about 0.02 of its potential returns per unit of risk. Nokia Oyj is currently generating about -0.33 per unit of risk. If you would invest 1,568 in Getlink SE on August 28, 2024 and sell it today you would earn a total of 4.00 from holding Getlink SE or generate 0.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Getlink SE vs. Nokia Oyj
Performance |
| Timeline |
| Getlink SE |
| Nokia Oyj |
Getlink SE and Nokia Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Getlink SE and Nokia Oyj
The main advantage of trading using opposite Getlink SE and Nokia Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Getlink SE 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.| Getlink SE vs. Manitou BF SA | Getlink SE vs. Ossiam Minimum Variance | Getlink SE vs. Granite 3x LVMH | Getlink SE vs. 21Shares Polkadot ETP |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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