Correlation Between Nokia Corp and Immersion
Can any of the company-specific risk be diversified away by investing in both Nokia Corp and Immersion 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 Immersion 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 Immersion, you can compare the effects of market volatilities on Nokia Corp and Immersion 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 Immersion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nokia Corp and Immersion.
Diversification Opportunities for Nokia Corp and Immersion
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nokia and Immersion is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Nokia Corp ADR and Immersion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Immersion 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 Immersion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Immersion has no effect on the direction of Nokia Corp i.e., Nokia Corp and Immersion go up and down completely randomly.
Pair Corralation between Nokia Corp and Immersion
Considering the 90-day investment horizon Nokia Corp ADR is expected to under-perform the Immersion. But the stock apears to be less risky and, when comparing its historical volatility, Nokia Corp ADR is 1.25 times less risky than Immersion. The stock trades about -0.41 of its potential returns per unit of risk. The Immersion is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 883.00 in Immersion on August 27, 2024 and sell it today you would earn a total of 5.00 from holding Immersion or generate 0.57% 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. Immersion
Performance |
| Timeline |
| Nokia Corp ADR |
| Immersion |
Nokia Corp and Immersion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nokia Corp and Immersion
The main advantage of trading using opposite Nokia Corp and Immersion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nokia Corp position performs unexpectedly, Immersion 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 Immersion will offset losses from the drop in Immersion's long position.| Nokia Corp vs. Hewlett Packard Enterprise | Nokia Corp vs. Juniper Networks | Nokia Corp vs. Ciena Corp | Nokia Corp vs. Motorola Solutions |
| Immersion vs. D Wave Quantum | Immersion vs. Rigetti Computing | Immersion vs. Cricut Inc | Immersion vs. Quantum Computing |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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