Correlation Between Nokia and Parrot
Can any of the company-specific risk be diversified away by investing in both Nokia and Parrot 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 and Parrot into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nokia and Parrot, you can compare the effects of market volatilities on Nokia and Parrot 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 with a short position of Parrot. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nokia and Parrot.
Diversification Opportunities for Nokia and Parrot
Excellent diversification
The 3 months correlation between Nokia and Parrot is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Nokia and Parrot in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Parrot and Nokia 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 are associated (or correlated) with Parrot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Parrot has no effect on the direction of Nokia i.e., Nokia and Parrot go up and down completely randomly.
Pair Corralation between Nokia and Parrot
Assuming the 90 days horizon Nokia is expected to under-perform the Parrot. But the pink sheet apears to be less risky and, when comparing its historical volatility, Nokia is 1.93 times less risky than Parrot. The pink sheet trades about -0.34 of its potential returns per unit of risk. The Parrot is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 200.00 in Parrot on August 27, 2024 and sell it today you would earn a total of 38.00 from holding Parrot or generate 19.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nokia vs. Parrot
Performance |
| Timeline |
| Nokia |
| Parrot |
Nokia and Parrot Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nokia and Parrot
The main advantage of trading using opposite Nokia and Parrot positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nokia position performs unexpectedly, Parrot 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 Parrot will offset losses from the drop in Parrot's long position.| Nokia vs. Mynaric AG ADR | Nokia vs. Knowles Cor | Nokia vs. Comtech Telecommunications Corp | Nokia vs. Ituran Location and |
| Parrot vs. Boxlight Corp Class | Parrot vs. Siyata Mobile | Parrot vs. ClearOne | Parrot vs. Mobilicom Limited American |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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