Correlation Between Nokia Oyj and SSAB AB
Can any of the company-specific risk be diversified away by investing in both Nokia Oyj and SSAB AB 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 SSAB AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nokia Oyj and SSAB AB ser, you can compare the effects of market volatilities on Nokia Oyj and SSAB AB 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 SSAB AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nokia Oyj and SSAB AB.
Diversification Opportunities for Nokia Oyj and SSAB AB
Very weak diversification
The 3 months correlation between Nokia and SSAB is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Nokia Oyj and SSAB AB ser in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SSAB AB ser 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 SSAB AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SSAB AB ser has no effect on the direction of Nokia Oyj i.e., Nokia Oyj and SSAB AB go up and down completely randomly.
Pair Corralation between Nokia Oyj and SSAB AB
Assuming the 90 days trading horizon Nokia Oyj is expected to generate 0.84 times more return on investment than SSAB AB. However, Nokia Oyj is 1.19 times less risky than SSAB AB. It trades about 0.06 of its potential returns per unit of risk. SSAB AB ser is currently generating about -0.07 per unit of risk. If you would invest 355.00 in Nokia Oyj on September 1, 2024 and sell it today you would earn a total of 43.00 from holding Nokia Oyj or generate 12.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nokia Oyj vs. SSAB AB ser
Performance |
| Timeline |
| Nokia Oyj |
| SSAB AB ser |
Nokia Oyj and SSAB AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nokia Oyj and SSAB AB
The main advantage of trading using opposite Nokia Oyj and SSAB AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nokia Oyj position performs unexpectedly, SSAB AB 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 SSAB AB will offset losses from the drop in SSAB AB's long position.| Nokia Oyj vs. Tecnotree Oyj | Nokia Oyj vs. Qt Group Oyj | Nokia Oyj vs. Bittium Oyj | Nokia Oyj vs. Harvia Oyj |
| SSAB AB vs. Outokumpu Oyj | SSAB AB vs. Nordea Bank Abp | SSAB AB vs. Telia Company AB | SSAB AB vs. Wartsila Oyj Abp |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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