Correlation Between KONE Oyj and Nurminen Logistics
Can any of the company-specific risk be diversified away by investing in both KONE Oyj and Nurminen Logistics 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 KONE Oyj and Nurminen Logistics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KONE Oyj and Nurminen Logistics Oyj, you can compare the effects of market volatilities on KONE Oyj and Nurminen Logistics 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 KONE Oyj with a short position of Nurminen Logistics. Check out your portfolio center. Please also check ongoing floating volatility patterns of KONE Oyj and Nurminen Logistics.
Diversification Opportunities for KONE Oyj and Nurminen Logistics
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between KONE and Nurminen is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding KONE Oyj and Nurminen Logistics Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nurminen Logistics Oyj and KONE 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 KONE Oyj are associated (or correlated) with Nurminen Logistics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nurminen Logistics Oyj has no effect on the direction of KONE Oyj i.e., KONE Oyj and Nurminen Logistics go up and down completely randomly.
Pair Corralation between KONE Oyj and Nurminen Logistics
Assuming the 90 days trading horizon KONE Oyj is expected to generate 0.57 times more return on investment than Nurminen Logistics. However, KONE Oyj is 1.74 times less risky than Nurminen Logistics. It trades about 0.05 of its potential returns per unit of risk. Nurminen Logistics Oyj is currently generating about 0.02 per unit of risk. If you would invest 4,062 in KONE Oyj on September 12, 2024 and sell it today you would earn a total of 830.00 from holding KONE Oyj or generate 20.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KONE Oyj vs. Nurminen Logistics Oyj
Performance |
| Timeline |
| KONE Oyj |
| Nurminen Logistics Oyj |
KONE Oyj and Nurminen Logistics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KONE Oyj and Nurminen Logistics
The main advantage of trading using opposite KONE Oyj and Nurminen Logistics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KONE Oyj position performs unexpectedly, Nurminen Logistics 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 Nurminen Logistics will offset losses from the drop in Nurminen Logistics' long position.| KONE Oyj vs. Sampo Oyj A | KONE Oyj vs. Fortum Oyj | KONE Oyj vs. UPM Kymmene Oyj | KONE Oyj vs. Neste Oil Oyj |
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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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