Correlation Between Media and Nanoform Finland
Can any of the company-specific risk be diversified away by investing in both Media 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 Media and Nanoform Finland into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Media and Games and Nanoform Finland Plc, you can compare the effects of market volatilities on Media 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 Media with a short position of Nanoform Finland. Check out your portfolio center. Please also check ongoing floating volatility patterns of Media and Nanoform Finland.
Diversification Opportunities for Media and Nanoform Finland
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Media and Nanoform is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Media and Games 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 Media 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 Media and Games 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 Media i.e., Media and Nanoform Finland go up and down completely randomly.
Pair Corralation between Media and Nanoform Finland
Assuming the 90 days trading horizon Media and Games is expected to generate 1.0 times more return on investment than Nanoform Finland. However, Media and Games is 1.0 times less risky than Nanoform Finland. It trades about 0.06 of its potential returns per unit of risk. Nanoform Finland Plc is currently generating about -0.03 per unit of risk. If you would invest 1,934 in Media and Games on September 13, 2024 and sell it today you would earn a total of 1,961 from holding Media and Games or generate 101.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Media and Games vs. Nanoform Finland Plc
Performance |
| Timeline |
| Media and Games |
| Nanoform Finland Plc |
Media and Nanoform Finland Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Media and Nanoform Finland
The main advantage of trading using opposite Media and Nanoform Finland positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Media 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.The idea behind Media and Games and Nanoform Finland Plc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Nanoform Finland vs. Bavarian Nordic | Nanoform Finland vs. BioPorto | Nanoform Finland vs. Zaptec AS | Nanoform Finland vs. cBrain 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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