Correlation Between Nokia Corp and Hewlett Packard
Can any of the company-specific risk be diversified away by investing in both Nokia Corp and Hewlett Packard 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 Hewlett Packard 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 Hewlett Packard Enterprise, you can compare the effects of market volatilities on Nokia Corp and Hewlett Packard 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 Hewlett Packard. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nokia Corp and Hewlett Packard.
Diversification Opportunities for Nokia Corp and Hewlett Packard
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nokia and Hewlett is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Nokia Corp ADR and Hewlett Packard Enterprise in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hewlett Packard Ente 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 Hewlett Packard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hewlett Packard Ente has no effect on the direction of Nokia Corp i.e., Nokia Corp and Hewlett Packard go up and down completely randomly.
Pair Corralation between Nokia Corp and Hewlett Packard
Considering the 90-day investment horizon Nokia Corp is expected to generate 18.26 times less return on investment than Hewlett Packard. But when comparing it to its historical volatility, Nokia Corp ADR is 1.47 times less risky than Hewlett Packard. It trades about 0.0 of its potential returns per unit of risk. Hewlett Packard Enterprise is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,994 in Hewlett Packard Enterprise on November 1, 2024 and sell it today you would earn a total of 123.50 from holding Hewlett Packard Enterprise or generate 6.19% 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. Hewlett Packard Enterprise
Performance |
| Timeline |
| Nokia Corp ADR |
| Hewlett Packard Ente |
Nokia Corp and Hewlett Packard Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nokia Corp and Hewlett Packard
The main advantage of trading using opposite Nokia Corp and Hewlett Packard positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nokia Corp position performs unexpectedly, Hewlett Packard 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 Hewlett Packard will offset losses from the drop in Hewlett Packard's long position.| Nokia Corp vs. Hewlett Packard Enterprise | Nokia Corp vs. Juniper Networks | Nokia Corp vs. Ciena Corp | Nokia Corp vs. Motorola Solutions |
| Hewlett Packard vs. Nokia Corp ADR | Hewlett Packard vs. Juniper Networks | Hewlett Packard vs. Ciena Corp | Hewlett Packard vs. Motorola Solutions |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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