Correlation Between Nokia Oyj and United Bankers
Can any of the company-specific risk be diversified away by investing in both Nokia Oyj and United Bankers 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 United Bankers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nokia Oyj and United Bankers Oyj, you can compare the effects of market volatilities on Nokia Oyj and United Bankers 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 United Bankers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nokia Oyj and United Bankers.
Diversification Opportunities for Nokia Oyj and United Bankers
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Nokia and United is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Nokia Oyj and United Bankers Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Bankers 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 United Bankers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Bankers Oyj has no effect on the direction of Nokia Oyj i.e., Nokia Oyj and United Bankers go up and down completely randomly.
Pair Corralation between Nokia Oyj and United Bankers
Assuming the 90 days trading horizon Nokia Oyj is expected to under-perform the United Bankers. But the stock apears to be less risky and, when comparing its historical volatility, Nokia Oyj is 1.06 times less risky than United Bankers. The stock trades about 0.0 of its potential returns per unit of risk. The United Bankers Oyj is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,195 in United Bankers Oyj on August 30, 2024 and sell it today you would earn a total of 605.00 from holding United Bankers Oyj or generate 50.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nokia Oyj vs. United Bankers Oyj
Performance |
| Timeline |
| Nokia Oyj |
| United Bankers Oyj |
Nokia Oyj and United Bankers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nokia Oyj and United Bankers
The main advantage of trading using opposite Nokia Oyj and United Bankers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nokia Oyj position performs unexpectedly, United Bankers 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 United Bankers will offset losses from the drop in United Bankers' 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 |
| United Bankers vs. Alandsbanken Abp A | United Bankers vs. Nordea Bank Abp | United Bankers vs. SSH Communications Security | United Bankers vs. Tamtron Group Oyj |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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