Correlation Between Nokia Corp and Infinera
Can any of the company-specific risk be diversified away by investing in both Nokia Corp and Infinera 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 Infinera 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 Infinera, you can compare the effects of market volatilities on Nokia Corp and Infinera 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 Infinera. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nokia Corp and Infinera.
Diversification Opportunities for Nokia Corp and Infinera
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nokia and Infinera is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Nokia Corp ADR and Infinera in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Infinera 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 Infinera. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Infinera has no effect on the direction of Nokia Corp i.e., Nokia Corp and Infinera go up and down completely randomly.
Pair Corralation between Nokia Corp and Infinera
Considering the 90-day investment horizon Nokia Corp ADR is expected to generate 2.61 times more return on investment than Infinera. However, Nokia Corp is 2.61 times more volatile than Infinera. It trades about 0.05 of its potential returns per unit of risk. Infinera is currently generating about 0.1 per unit of risk. If you would invest 435.00 in Nokia Corp ADR on November 2, 2024 and sell it today you would earn a total of 35.00 from holding Nokia Corp ADR or generate 8.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nokia Corp ADR vs. Infinera
Performance |
| Timeline |
| Nokia Corp ADR |
| Infinera |
Nokia Corp and Infinera Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nokia Corp and Infinera
The main advantage of trading using opposite Nokia Corp and Infinera positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nokia Corp position performs unexpectedly, Infinera 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 Infinera will offset losses from the drop in Infinera's long position.| Nokia Corp vs. Hewlett Packard Enterprise | Nokia Corp vs. Juniper Networks | Nokia Corp vs. Ciena Corp | Nokia Corp vs. Motorola Solutions |
| Infinera vs. Juniper Networks | Infinera vs. Lumentum Holdings | Infinera vs. Extreme Networks | Infinera vs. Clearfield |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
Other Complementary Tools
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |