Correlation Between Nokian Renkaat and OppFi
Can any of the company-specific risk be diversified away by investing in both Nokian Renkaat and OppFi 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 Nokian Renkaat and OppFi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nokian Renkaat Oyj and OppFi Inc, you can compare the effects of market volatilities on Nokian Renkaat and OppFi 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 Nokian Renkaat with a short position of OppFi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nokian Renkaat and OppFi.
Diversification Opportunities for Nokian Renkaat and OppFi
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Nokian and OppFi is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Nokian Renkaat Oyj and OppFi Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OppFi Inc and Nokian Renkaat 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 Nokian Renkaat Oyj are associated (or correlated) with OppFi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OppFi Inc has no effect on the direction of Nokian Renkaat i.e., Nokian Renkaat and OppFi go up and down completely randomly.
Pair Corralation between Nokian Renkaat and OppFi
Assuming the 90 days horizon Nokian Renkaat Oyj is expected to under-perform the OppFi. But the pink sheet apears to be less risky and, when comparing its historical volatility, Nokian Renkaat Oyj is 1.14 times less risky than OppFi. The pink sheet trades about -0.01 of its potential returns per unit of risk. The OppFi Inc is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 204.00 in OppFi Inc on September 13, 2024 and sell it today you would earn a total of 474.00 from holding OppFi Inc or generate 232.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 72.12% |
| Values | Daily Returns |
Nokian Renkaat Oyj vs. OppFi Inc
Performance |
| Timeline |
| Nokian Renkaat Oyj |
| OppFi Inc |
Nokian Renkaat and OppFi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nokian Renkaat and OppFi
The main advantage of trading using opposite Nokian Renkaat and OppFi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nokian Renkaat position performs unexpectedly, OppFi 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 OppFi will offset losses from the drop in OppFi's long position.| Nokian Renkaat vs. PT Astra International | Nokian Renkaat vs. Astra International Tbk | Nokian Renkaat vs. Mobileye Global Class | Nokian Renkaat vs. HUMANA INC |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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