Correlation Between Motorola Solutions and Nokia Corp
Can any of the company-specific risk be diversified away by investing in both Motorola Solutions and Nokia Corp 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 Motorola Solutions and Nokia Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Motorola Solutions and Nokia Corp ADR, you can compare the effects of market volatilities on Motorola Solutions and Nokia Corp 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 Motorola Solutions with a short position of Nokia Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Motorola Solutions and Nokia Corp.
Diversification Opportunities for Motorola Solutions and Nokia Corp
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Motorola and Nokia is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Motorola Solutions and Nokia Corp ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nokia Corp ADR and Motorola Solutions 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 Motorola Solutions are associated (or correlated) with Nokia Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nokia Corp ADR has no effect on the direction of Motorola Solutions i.e., Motorola Solutions and Nokia Corp go up and down completely randomly.
Pair Corralation between Motorola Solutions and Nokia Corp
Considering the 90-day investment horizon Motorola Solutions is expected to generate 0.65 times more return on investment than Nokia Corp. However, Motorola Solutions is 1.55 times less risky than Nokia Corp. It trades about 0.16 of its potential returns per unit of risk. Nokia Corp ADR is currently generating about -0.04 per unit of risk. If you would invest 44,106 in Motorola Solutions on August 30, 2024 and sell it today you would earn a total of 5,960 from holding Motorola Solutions or generate 13.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Motorola Solutions vs. Nokia Corp ADR
Performance |
| Timeline |
| Motorola Solutions |
| Nokia Corp ADR |
Motorola Solutions and Nokia Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Motorola Solutions and Nokia Corp
The main advantage of trading using opposite Motorola Solutions and Nokia Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Motorola Solutions position performs unexpectedly, Nokia Corp 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 Corp will offset losses from the drop in Nokia Corp's long position.| Motorola Solutions vs. Ciena Corp | Motorola Solutions vs. Extreme Networks | Motorola Solutions vs. Hewlett Packard Enterprise | Motorola Solutions vs. NETGEAR |
| Nokia Corp vs. Hewlett Packard Enterprise | Nokia Corp vs. Juniper Networks | Nokia Corp vs. Ciena Corp | Nokia Corp vs. Motorola Solutions |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
Other Complementary Tools
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency |