Correlation Between Nokia Oyj and SRV Group
Can any of the company-specific risk be diversified away by investing in both Nokia Oyj and SRV Group 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 SRV Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nokia Oyj and SRV Group plc, you can compare the effects of market volatilities on Nokia Oyj and SRV Group 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 SRV Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nokia Oyj and SRV Group.
Diversification Opportunities for Nokia Oyj and SRV Group
Very good diversification
The 3 months correlation between Nokia and SRV is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Nokia Oyj and SRV Group plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SRV Group plc 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 SRV Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SRV Group plc has no effect on the direction of Nokia Oyj i.e., Nokia Oyj and SRV Group go up and down completely randomly.
Pair Corralation between Nokia Oyj and SRV Group
Assuming the 90 days trading horizon Nokia Oyj is expected to generate 0.9 times more return on investment than SRV Group. However, Nokia Oyj is 1.11 times less risky than SRV Group. It trades about 0.22 of its potential returns per unit of risk. SRV Group plc is currently generating about -0.24 per unit of risk. If you would invest 438.00 in Nokia Oyj on November 18, 2024 and sell it today you would earn a total of 39.00 from holding Nokia Oyj or generate 8.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nokia Oyj vs. SRV Group plc
Performance |
| Timeline |
| Nokia Oyj |
| SRV Group plc |
Nokia Oyj and SRV Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nokia Oyj and SRV Group
The main advantage of trading using opposite Nokia Oyj and SRV Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nokia Oyj position performs unexpectedly, SRV Group 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 SRV Group will offset losses from the drop in SRV Group'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 |
| SRV Group vs. Ponsse Oyj 1 | SRV Group vs. Lassila Tikanoja Oyj | SRV Group vs. Tokmanni Group Oyj | SRV Group vs. CapMan Oyj B |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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