Correlation Between Nokia Oyj and Etteplan Oyj
Can any of the company-specific risk be diversified away by investing in both Nokia Oyj and Etteplan Oyj 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 Etteplan Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nokia Oyj and Etteplan Oyj, you can compare the effects of market volatilities on Nokia Oyj and Etteplan Oyj 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 Etteplan Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nokia Oyj and Etteplan Oyj.
Diversification Opportunities for Nokia Oyj and Etteplan Oyj
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Nokia and Etteplan is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Nokia Oyj and Etteplan Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Etteplan Oyj 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 Etteplan Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Etteplan Oyj has no effect on the direction of Nokia Oyj i.e., Nokia Oyj and Etteplan Oyj go up and down completely randomly.
Pair Corralation between Nokia Oyj and Etteplan Oyj
Assuming the 90 days trading horizon Nokia Oyj is expected to generate 1.0 times more return on investment than Etteplan Oyj. However, Nokia Oyj is 1.0 times more volatile than Etteplan Oyj. It trades about 0.0 of its potential returns per unit of risk. Etteplan Oyj is currently generating about -0.02 per unit of risk. If you would invest 438.00 in Nokia Oyj on August 30, 2024 and sell it today you would lose (42.00) from holding Nokia Oyj or give up 9.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Nokia Oyj vs. Etteplan Oyj
Performance |
| Timeline |
| Nokia Oyj |
| Etteplan Oyj |
Nokia Oyj and Etteplan Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nokia Oyj and Etteplan Oyj
The main advantage of trading using opposite Nokia Oyj and Etteplan Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nokia Oyj position performs unexpectedly, Etteplan Oyj 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 Etteplan Oyj will offset losses from the drop in Etteplan Oyj's long position.| Nokia Oyj vs. Fortum Oyj | Nokia Oyj vs. Nordea Bank Abp | Nokia Oyj vs. Sampo Oyj A | Nokia Oyj vs. Neste Oil Oyj |
| Etteplan Oyj vs. Telefonaktiebolaget LM Ericsson | Etteplan Oyj vs. SSAB AB ser | Etteplan Oyj vs. SSAB AB ser | Etteplan Oyj vs. Telia Company AB |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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