Correlation Between Nokia Corp and Cisco Systems
Can any of the company-specific risk be diversified away by investing in both Nokia Corp and Cisco Systems 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 Corp and Cisco Systems into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nokia Corp ADR and Cisco Systems, you can compare the effects of market volatilities on Nokia Corp and Cisco Systems 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 Corp with a short position of Cisco Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nokia Corp and Cisco Systems.
Diversification Opportunities for Nokia Corp and Cisco Systems
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nokia and Cisco is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Nokia Corp ADR and Cisco Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cisco Systems and Nokia Corp 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 Corp ADR are associated (or correlated) with Cisco Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cisco Systems has no effect on the direction of Nokia Corp i.e., Nokia Corp and Cisco Systems go up and down completely randomly.
Pair Corralation between Nokia Corp and Cisco Systems
Considering the 90-day investment horizon Nokia Corp ADR is expected to generate 1.64 times more return on investment than Cisco Systems. However, Nokia Corp is 1.64 times more volatile than Cisco Systems. It trades about 0.13 of its potential returns per unit of risk. Cisco Systems is currently generating about 0.12 per unit of risk. If you would invest 446.00 in Nokia Corp ADR on November 2, 2024 and sell it today you would earn a total of 24.00 from holding Nokia Corp ADR or generate 5.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nokia Corp ADR vs. Cisco Systems
Performance |
| Timeline |
| Nokia Corp ADR |
| Cisco Systems |
Nokia Corp and Cisco Systems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nokia Corp and Cisco Systems
The main advantage of trading using opposite Nokia Corp and Cisco Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nokia Corp position performs unexpectedly, Cisco Systems 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 Cisco Systems will offset losses from the drop in Cisco Systems' long position.| Nokia Corp vs. Hewlett Packard Enterprise | Nokia Corp vs. Juniper Networks | Nokia Corp vs. Ciena Corp | Nokia Corp vs. Motorola Solutions |
| Cisco Systems vs. Comtech Telecommunications Corp | Cisco Systems vs. Silicom | Cisco Systems vs. Knowles Cor | Cisco Systems vs. Mynaric AG ADR |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
Other Complementary Tools
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios |