Correlation Between Nokia Corp and Ubiquiti Networks
Can any of the company-specific risk be diversified away by investing in both Nokia Corp and Ubiquiti Networks 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 Ubiquiti Networks 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 Ubiquiti Networks, you can compare the effects of market volatilities on Nokia Corp and Ubiquiti Networks 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 Ubiquiti Networks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nokia Corp and Ubiquiti Networks.
Diversification Opportunities for Nokia Corp and Ubiquiti Networks
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Nokia and Ubiquiti is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Nokia Corp ADR and Ubiquiti Networks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ubiquiti Networks 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 Ubiquiti Networks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ubiquiti Networks has no effect on the direction of Nokia Corp i.e., Nokia Corp and Ubiquiti Networks go up and down completely randomly.
Pair Corralation between Nokia Corp and Ubiquiti Networks
Considering the 90-day investment horizon Nokia Corp ADR is expected to under-perform the Ubiquiti Networks. But the stock apears to be less risky and, when comparing its historical volatility, Nokia Corp ADR is 2.56 times less risky than Ubiquiti Networks. The stock trades about -0.39 of its potential returns per unit of risk. The Ubiquiti Networks is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest 25,815 in Ubiquiti Networks on August 27, 2024 and sell it today you would earn a total of 10,033 from holding Ubiquiti Networks or generate 38.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nokia Corp ADR vs. Ubiquiti Networks
Performance |
| Timeline |
| Nokia Corp ADR |
| Ubiquiti Networks |
Nokia Corp and Ubiquiti Networks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nokia Corp and Ubiquiti Networks
The main advantage of trading using opposite Nokia Corp and Ubiquiti Networks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nokia Corp position performs unexpectedly, Ubiquiti Networks 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 Ubiquiti Networks will offset losses from the drop in Ubiquiti Networks' long position.| Nokia Corp vs. Ichor Holdings | Nokia Corp vs. Fabrinet | Nokia Corp vs. Hello Group | Nokia Corp vs. Ultra Clean Holdings |
| Ubiquiti Networks vs. Ichor Holdings | Ubiquiti Networks vs. Fabrinet | Ubiquiti Networks vs. Hello Group | Ubiquiti Networks vs. Ultra Clean Holdings |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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