Correlation Between Nokia and Tower One
Can any of the company-specific risk be diversified away by investing in both Nokia and Tower One 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 Nokia and Tower One into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nokia and Tower One Wireless, you can compare the effects of market volatilities on Nokia and Tower One 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 Nokia with a short position of Tower One. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nokia and Tower One.
Diversification Opportunities for Nokia and Tower One
Pay attention - limited upside
The 3 months correlation between Nokia and Tower is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Nokia and Tower One Wireless in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tower One Wireless and Nokia 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 Nokia are associated (or correlated) with Tower One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tower One Wireless has no effect on the direction of Nokia i.e., Nokia and Tower One go up and down completely randomly.
Pair Corralation between Nokia and Tower One
If you would invest 339.00 in Nokia on November 3, 2024 and sell it today you would earn a total of 114.00 from holding Nokia or generate 33.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nokia vs. Tower One Wireless
Performance |
| Timeline |
| Nokia |
| Tower One Wireless |
Nokia and Tower One Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nokia and Tower One
The main advantage of trading using opposite Nokia and Tower One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nokia position performs unexpectedly, Tower One 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 Tower One will offset losses from the drop in Tower One's long position.| Nokia vs. Xenia Hotels Resorts | Nokia vs. PICKN PAY STORES | Nokia vs. SPARTAN STORES | Nokia vs. BRAEMAR HOTELS RES |
| Tower One vs. ARROW ELECTRONICS | Tower One vs. Meiko Electronics Co | Tower One vs. Delta Electronics Public | Tower One vs. Nucletron Electronic Aktiengesellschaft |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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