Correlation Between Nitro Games and Genovis AB
Can any of the company-specific risk be diversified away by investing in both Nitro Games and Genovis 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 Nitro Games and Genovis AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nitro Games Oyj and Genovis AB, you can compare the effects of market volatilities on Nitro Games and Genovis 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 Nitro Games with a short position of Genovis AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nitro Games and Genovis AB.
Diversification Opportunities for Nitro Games and Genovis AB
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Nitro and Genovis is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Nitro Games Oyj and Genovis AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genovis AB and Nitro Games 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 Nitro Games Oyj are associated (or correlated) with Genovis AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genovis AB has no effect on the direction of Nitro Games i.e., Nitro Games and Genovis AB go up and down completely randomly.
Pair Corralation between Nitro Games and Genovis AB
Assuming the 90 days trading horizon Nitro Games Oyj is expected to under-perform the Genovis AB. In addition to that, Nitro Games is 1.41 times more volatile than Genovis AB. It trades about -0.03 of its total potential returns per unit of risk. Genovis AB is currently generating about -0.02 per unit of volatility. If you would invest 6,230 in Genovis AB on November 5, 2024 and sell it today you would lose (3,185) from holding Genovis AB or give up 51.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Nitro Games Oyj vs. Genovis AB
Performance |
| Timeline |
| Nitro Games Oyj |
| Genovis AB |
Nitro Games and Genovis AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nitro Games and Genovis AB
The main advantage of trading using opposite Nitro Games and Genovis AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nitro Games position performs unexpectedly, Genovis 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 Genovis AB will offset losses from the drop in Genovis AB's long position.| Nitro Games vs. Stillfront Group AB | Nitro Games vs. G5 Entertainment publ | Nitro Games vs. Enad Global 7 | Nitro Games vs. Starbreeze AB |
| Genovis AB vs. Invisio Communications AB | Genovis AB vs. Nitro Games Oyj | Genovis AB vs. New Nordic Healthbrands | Genovis AB vs. Train Alliance Sweden |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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