Correlation Between Nanoform Finland and Cyxone AB
Can any of the company-specific risk be diversified away by investing in both Nanoform Finland and Cyxone 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 Cyxone 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 Cyxone AB, you can compare the effects of market volatilities on Nanoform Finland and Cyxone 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 Cyxone AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nanoform Finland and Cyxone AB.
Diversification Opportunities for Nanoform Finland and Cyxone AB
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Nanoform and Cyxone is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Nanoform Finland Plc and Cyxone AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cyxone AB 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 Cyxone AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cyxone AB has no effect on the direction of Nanoform Finland i.e., Nanoform Finland and Cyxone AB go up and down completely randomly.
Pair Corralation between Nanoform Finland and Cyxone AB
Assuming the 90 days trading horizon Nanoform Finland Plc is expected to under-perform the Cyxone AB. But the stock apears to be less risky and, when comparing its historical volatility, Nanoform Finland Plc is 3.49 times less risky than Cyxone AB. The stock trades about -0.04 of its potential returns per unit of risk. The Cyxone AB is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 3.95 in Cyxone AB on August 28, 2024 and sell it today you would lose (0.75) from holding Cyxone AB or give up 18.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nanoform Finland Plc vs. Cyxone AB
Performance |
| Timeline |
| Nanoform Finland Plc |
| Cyxone AB |
Nanoform Finland and Cyxone AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nanoform Finland and Cyxone AB
The main advantage of trading using opposite Nanoform Finland and Cyxone AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nanoform Finland position performs unexpectedly, Cyxone 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 Cyxone AB will offset losses from the drop in Cyxone AB's long position.| Nanoform Finland vs. Leading Edge Materials | Nanoform Finland vs. JLT Mobile Computers | Nanoform Finland vs. Beowulf Mining PLC | Nanoform Finland vs. Systemair 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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