Correlation Between Kesko Oyj and Nanoform Finland
Can any of the company-specific risk be diversified away by investing in both Kesko Oyj and Nanoform Finland 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 Kesko Oyj and Nanoform Finland into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kesko Oyj and Nanoform Finland Plc, you can compare the effects of market volatilities on Kesko Oyj and Nanoform Finland 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 Kesko Oyj with a short position of Nanoform Finland. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kesko Oyj and Nanoform Finland.
Diversification Opportunities for Kesko Oyj and Nanoform Finland
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Kesko and Nanoform is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Kesko Oyj and Nanoform Finland Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nanoform Finland Plc and Kesko Oyj 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 Kesko Oyj are associated (or correlated) with Nanoform Finland. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nanoform Finland Plc has no effect on the direction of Kesko Oyj i.e., Kesko Oyj and Nanoform Finland go up and down completely randomly.
Pair Corralation between Kesko Oyj and Nanoform Finland
Assuming the 90 days trading horizon Kesko Oyj is expected to generate 0.4 times more return on investment than Nanoform Finland. However, Kesko Oyj is 2.51 times less risky than Nanoform Finland. It trades about 0.05 of its potential returns per unit of risk. Nanoform Finland Plc is currently generating about -0.01 per unit of risk. If you would invest 1,654 in Kesko Oyj on August 26, 2024 and sell it today you would earn a total of 258.00 from holding Kesko Oyj or generate 15.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kesko Oyj vs. Nanoform Finland Plc
Performance |
| Timeline |
| Kesko Oyj |
| Nanoform Finland Plc |
Kesko Oyj and Nanoform Finland Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kesko Oyj and Nanoform Finland
The main advantage of trading using opposite Kesko Oyj and Nanoform Finland positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kesko Oyj position performs unexpectedly, Nanoform Finland 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 Nanoform Finland will offset losses from the drop in Nanoform Finland's long position.| Kesko Oyj vs. Sampo Oyj A | Kesko Oyj vs. UPM Kymmene Oyj | Kesko Oyj vs. Valmet Oyj | Kesko Oyj vs. Elisa Oyj |
| Nanoform Finland vs. Spinnova Oy | Nanoform Finland vs. Qt Group Oyj | Nanoform Finland vs. Kempower Oyj | Nanoform Finland vs. Harvia Oyj |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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