Correlation Between Kofola CeskoSlovensko and Nokia Oyj
Can any of the company-specific risk be diversified away by investing in both Kofola CeskoSlovensko 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 Kofola CeskoSlovensko and Nokia Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kofola CeskoSlovensko as and Nokia Oyj, you can compare the effects of market volatilities on Kofola CeskoSlovensko 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 Kofola CeskoSlovensko with a short position of Nokia Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kofola CeskoSlovensko and Nokia Oyj.
Diversification Opportunities for Kofola CeskoSlovensko and Nokia Oyj
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kofola and Nokia is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Kofola CeskoSlovensko as and Nokia Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nokia Oyj and Kofola CeskoSlovensko 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 Kofola CeskoSlovensko as 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 Kofola CeskoSlovensko i.e., Kofola CeskoSlovensko and Nokia Oyj go up and down completely randomly.
Pair Corralation between Kofola CeskoSlovensko and Nokia Oyj
Assuming the 90 days trading horizon Kofola CeskoSlovensko as is expected to generate 0.52 times more return on investment than Nokia Oyj. However, Kofola CeskoSlovensko as is 1.93 times less risky than Nokia Oyj. It trades about 0.13 of its potential returns per unit of risk. Nokia Oyj is currently generating about -0.01 per unit of risk. If you would invest 21,584 in Kofola CeskoSlovensko as on August 24, 2024 and sell it today you would earn a total of 17,016 from holding Kofola CeskoSlovensko as or generate 78.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kofola CeskoSlovensko as vs. Nokia Oyj
Performance |
| Timeline |
| Kofola CeskoSlovensko |
| Nokia Oyj |
Kofola CeskoSlovensko and Nokia Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kofola CeskoSlovensko and Nokia Oyj
The main advantage of trading using opposite Kofola CeskoSlovensko and Nokia Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kofola CeskoSlovensko 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.| Kofola CeskoSlovensko vs. Moneta Money Bank | Kofola CeskoSlovensko vs. Komercni Banka AS | Kofola CeskoSlovensko vs. Cez AS | Kofola CeskoSlovensko vs. Erste Group Bank |
| Nokia Oyj vs. Cez AS | Nokia Oyj vs. MT 1997 AS | Nokia Oyj vs. Kofola CeskoSlovensko as | Nokia Oyj vs. HARDWARIO as |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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