Correlation Between Nanoform Finland and SSAB AB
Can any of the company-specific risk be diversified away by investing in both Nanoform Finland and SSAB AB 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 Nanoform Finland and SSAB AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nanoform Finland Plc and SSAB AB ser, you can compare the effects of market volatilities on Nanoform Finland and SSAB AB 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 Nanoform Finland with a short position of SSAB AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nanoform Finland and SSAB AB.
Diversification Opportunities for Nanoform Finland and SSAB AB
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Nanoform and SSAB is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Nanoform Finland Plc and SSAB AB ser in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SSAB AB ser and Nanoform Finland 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 Nanoform Finland Plc are associated (or correlated) with SSAB AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SSAB AB ser has no effect on the direction of Nanoform Finland i.e., Nanoform Finland and SSAB AB go up and down completely randomly.
Pair Corralation between Nanoform Finland and SSAB AB
Assuming the 90 days trading horizon Nanoform Finland Plc is expected to generate 2.67 times more return on investment than SSAB AB. However, Nanoform Finland is 2.67 times more volatile than SSAB AB ser. It trades about 0.1 of its potential returns per unit of risk. SSAB AB ser is currently generating about -0.04 per unit of risk. If you would invest 145.00 in Nanoform Finland Plc on August 30, 2024 and sell it today you would earn a total of 15.00 from holding Nanoform Finland Plc or generate 10.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nanoform Finland Plc vs. SSAB AB ser
Performance |
| Timeline |
| Nanoform Finland Plc |
| SSAB AB ser |
Nanoform Finland and SSAB AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nanoform Finland and SSAB AB
The main advantage of trading using opposite Nanoform Finland and SSAB AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nanoform Finland position performs unexpectedly, SSAB AB 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 SSAB AB will offset losses from the drop in SSAB AB's long position.| Nanoform Finland vs. Spinnova Oy | Nanoform Finland vs. Qt Group Oyj | Nanoform Finland vs. Kempower Oyj | Nanoform Finland vs. Harvia Oyj |
| SSAB AB vs. SSAB AB ser | SSAB AB vs. Outokumpu Oyj | SSAB AB vs. Metsa Board Oyj | SSAB AB vs. Telia Company AB |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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