Correlation Between Nitro Games and Invisio Communications
Can any of the company-specific risk be diversified away by investing in both Nitro Games and Invisio Communications 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 Invisio Communications 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 Invisio Communications AB, you can compare the effects of market volatilities on Nitro Games and Invisio Communications 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 Invisio Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nitro Games and Invisio Communications.
Diversification Opportunities for Nitro Games and Invisio Communications
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nitro and Invisio is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Nitro Games Oyj and Invisio Communications AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invisio Communications 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 Invisio Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invisio Communications has no effect on the direction of Nitro Games i.e., Nitro Games and Invisio Communications go up and down completely randomly.
Pair Corralation between Nitro Games and Invisio Communications
Assuming the 90 days trading horizon Nitro Games Oyj is expected to under-perform the Invisio Communications. In addition to that, Nitro Games is 3.3 times more volatile than Invisio Communications AB. It trades about -0.23 of its total potential returns per unit of risk. Invisio Communications AB is currently generating about 0.4 per unit of volatility. If you would invest 33,200 in Invisio Communications AB on December 11, 2024 and sell it today you would earn a total of 8,750 from holding Invisio Communications AB or generate 26.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nitro Games Oyj vs. Invisio Communications AB
Performance |
| Timeline |
| Nitro Games Oyj |
| Invisio Communications |
Nitro Games and Invisio Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nitro Games and Invisio Communications
The main advantage of trading using opposite Nitro Games and Invisio Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nitro Games position performs unexpectedly, Invisio Communications 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 Invisio Communications will offset losses from the drop in Invisio Communications' 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 |
| Invisio Communications vs. Hexatronic Group AB | Invisio Communications vs. CellaVision AB | Invisio Communications vs. Xvivo Perfusion AB | Invisio Communications vs. Sectra 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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