Correlation Between Nokia Corp and U Blox
Can any of the company-specific risk be diversified away by investing in both Nokia Corp and U Blox 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 U Blox 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 u blox Holding AG, you can compare the effects of market volatilities on Nokia Corp and U Blox 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 U Blox. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nokia Corp and U Blox.
Diversification Opportunities for Nokia Corp and U Blox
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nokia and UBLXF is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Nokia Corp ADR and u blox Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on u blox Holding 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 U Blox. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of u blox Holding has no effect on the direction of Nokia Corp i.e., Nokia Corp and U Blox go up and down completely randomly.
Pair Corralation between Nokia Corp and U Blox
Considering the 90-day investment horizon Nokia Corp ADR is expected to generate 0.77 times more return on investment than U Blox. However, Nokia Corp ADR is 1.31 times less risky than U Blox. It trades about -0.02 of its potential returns per unit of risk. u blox Holding AG is currently generating about -0.04 per unit of risk. If you would invest 435.00 in Nokia Corp ADR on September 2, 2024 and sell it today you would lose (15.00) from holding Nokia Corp ADR or give up 3.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.46% |
| Values | Daily Returns |
Nokia Corp ADR vs. u blox Holding AG
Performance |
| Timeline |
| Nokia Corp ADR |
| u blox Holding |
Nokia Corp and U Blox Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nokia Corp and U Blox
The main advantage of trading using opposite Nokia Corp and U Blox positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nokia Corp position performs unexpectedly, U Blox 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 U Blox will offset losses from the drop in U Blox's long position.| Nokia Corp vs. Comtech Telecommunications Corp | Nokia Corp vs. KVH Industries | Nokia Corp vs. Silicom | Nokia Corp vs. Knowles Cor |
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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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