Correlation Between Nokia Oyj and Eneva SA
Can any of the company-specific risk be diversified away by investing in both Nokia Oyj and Eneva SA 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 Oyj and Eneva SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nokia Oyj and Eneva SA, you can compare the effects of market volatilities on Nokia Oyj and Eneva SA 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 Oyj with a short position of Eneva SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nokia Oyj and Eneva SA.
Diversification Opportunities for Nokia Oyj and Eneva SA
Very good diversification
The 3 months correlation between Nokia and Eneva is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Nokia Oyj and Eneva SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eneva SA and Nokia Oyj 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 Oyj are associated (or correlated) with Eneva SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eneva SA has no effect on the direction of Nokia Oyj i.e., Nokia Oyj and Eneva SA go up and down completely randomly.
Pair Corralation between Nokia Oyj and Eneva SA
Assuming the 90 days trading horizon Nokia Oyj is expected to generate 0.34 times more return on investment than Eneva SA. However, Nokia Oyj is 2.96 times less risky than Eneva SA. It trades about 0.12 of its potential returns per unit of risk. Eneva SA is currently generating about -0.04 per unit of risk. If you would invest 2,676 in Nokia Oyj on October 21, 2024 and sell it today you would earn a total of 66.00 from holding Nokia Oyj or generate 2.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nokia Oyj vs. Eneva SA
Performance |
| Timeline |
| Nokia Oyj |
| Eneva SA |
Nokia Oyj and Eneva SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nokia Oyj and Eneva SA
The main advantage of trading using opposite Nokia Oyj and Eneva SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nokia Oyj position performs unexpectedly, Eneva SA 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 Eneva SA will offset losses from the drop in Eneva SA's long position.| Nokia Oyj vs. Cisco Systems | Nokia Oyj vs. Motorola Solutions | Nokia Oyj vs. Zebra Technologies | Nokia Oyj vs. Hewlett Packard Enterprise |
| Eneva SA vs. Banco BTG Pactual | Eneva SA vs. Cosan SA | Eneva SA vs. Banco Pan SA | Eneva SA vs. Equatorial Energia SA |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |