Correlation Between Nokia Corp and Daktronics
Can any of the company-specific risk be diversified away by investing in both Nokia Corp and Daktronics 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 Daktronics 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 Daktronics, you can compare the effects of market volatilities on Nokia Corp and Daktronics 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 Daktronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nokia Corp and Daktronics.
Diversification Opportunities for Nokia Corp and Daktronics
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Nokia and Daktronics is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Nokia Corp ADR and Daktronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daktronics 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 Daktronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daktronics has no effect on the direction of Nokia Corp i.e., Nokia Corp and Daktronics go up and down completely randomly.
Pair Corralation between Nokia Corp and Daktronics
Considering the 90-day investment horizon Nokia Corp ADR is expected to generate 1.08 times more return on investment than Daktronics. However, Nokia Corp is 1.08 times more volatile than Daktronics. It trades about 0.07 of its potential returns per unit of risk. Daktronics is currently generating about 0.01 per unit of risk. If you would invest 466.00 in Nokia Corp ADR on November 9, 2024 and sell it today you would earn a total of 13.00 from holding Nokia Corp ADR or generate 2.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nokia Corp ADR vs. Daktronics
Performance |
| Timeline |
| Nokia Corp ADR |
| Daktronics |
Nokia Corp and Daktronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nokia Corp and Daktronics
The main advantage of trading using opposite Nokia Corp and Daktronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nokia Corp position performs unexpectedly, Daktronics 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 Daktronics will offset losses from the drop in Daktronics' long position.| Nokia Corp vs. Hewlett Packard Enterprise | Nokia Corp vs. Juniper Networks | Nokia Corp vs. Ciena Corp | Nokia Corp vs. Motorola Solutions |
| Daktronics vs. Plexus Corp | Daktronics vs. OSI Systems | Daktronics vs. CTS Corporation | Daktronics vs. Benchmark Electronics |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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