Correlation Between Nokia Corp and Nokia
Can any of the company-specific risk be diversified away by investing in both Nokia Corp and Nokia 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 Nokia 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 Nokia, you can compare the effects of market volatilities on Nokia Corp and Nokia 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 Nokia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nokia Corp and Nokia.
Diversification Opportunities for Nokia Corp and Nokia
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Nokia and Nokia is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Nokia Corp ADR and Nokia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nokia 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 Nokia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nokia has no effect on the direction of Nokia Corp i.e., Nokia Corp and Nokia go up and down completely randomly.
Pair Corralation between Nokia Corp and Nokia
Considering the 90-day investment horizon Nokia Corp ADR is expected to generate 0.88 times more return on investment than Nokia. However, Nokia Corp ADR is 1.14 times less risky than Nokia. It trades about -0.34 of its potential returns per unit of risk. Nokia is currently generating about -0.32 per unit of risk. If you would invest 485.00 in Nokia Corp ADR on August 30, 2024 and sell it today you would lose (66.00) from holding Nokia Corp ADR or give up 13.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nokia Corp ADR vs. Nokia
Performance |
| Timeline |
| Nokia Corp ADR |
| Nokia |
Nokia Corp and Nokia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nokia Corp and Nokia
The main advantage of trading using opposite Nokia Corp and Nokia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nokia Corp position performs unexpectedly, Nokia 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 Nokia will offset losses from the drop in Nokia's long position.| Nokia Corp vs. Hewlett Packard Enterprise | Nokia Corp vs. Juniper Networks | Nokia Corp vs. Ciena Corp | Nokia Corp vs. Motorola Solutions |
| Nokia vs. Viavi Solutions | Nokia vs. SatixFy Communications | Nokia vs. Wialan Technologies | Nokia vs. Electronic Systems Technology |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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