Correlation Between Nokia Oyj and WITHSECURE
Can any of the company-specific risk be diversified away by investing in both Nokia Oyj and WITHSECURE 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 WITHSECURE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nokia Oyj and WITHSECURE, you can compare the effects of market volatilities on Nokia Oyj and WITHSECURE 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 WITHSECURE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nokia Oyj and WITHSECURE.
Diversification Opportunities for Nokia Oyj and WITHSECURE
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Nokia and WITHSECURE is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Nokia Oyj and WITHSECURE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WITHSECURE 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 WITHSECURE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WITHSECURE has no effect on the direction of Nokia Oyj i.e., Nokia Oyj and WITHSECURE go up and down completely randomly.
Pair Corralation between Nokia Oyj and WITHSECURE
Assuming the 90 days trading horizon Nokia Oyj is expected to generate 0.81 times more return on investment than WITHSECURE. However, Nokia Oyj is 1.23 times less risky than WITHSECURE. It trades about 0.06 of its potential returns per unit of risk. WITHSECURE is currently generating about -0.14 per unit of risk. If you would invest 356.00 in Nokia Oyj on September 2, 2024 and sell it today you would earn a total of 42.00 from holding Nokia Oyj or generate 11.8% 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. WITHSECURE
Performance |
| Timeline |
| Nokia Oyj |
| WITHSECURE |
Nokia Oyj and WITHSECURE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nokia Oyj and WITHSECURE
The main advantage of trading using opposite Nokia Oyj and WITHSECURE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nokia Oyj position performs unexpectedly, WITHSECURE 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 WITHSECURE will offset losses from the drop in WITHSECURE'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 |
| WITHSECURE vs. F SECURE OYJ | WITHSECURE vs. Qt Group Oyj | WITHSECURE vs. Tokmanni Group Oyj | WITHSECURE vs. Harvia 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 Stocks Directory module to find actively traded stocks across global markets.
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