Correlation Between Nokian Renkaat and Polyplex (Thailand)
Can any of the company-specific risk be diversified away by investing in both Nokian Renkaat and Polyplex (Thailand) 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 Nokian Renkaat and Polyplex (Thailand) into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nokian Renkaat Oyj and Polyplex Public, you can compare the effects of market volatilities on Nokian Renkaat and Polyplex (Thailand) 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 Nokian Renkaat with a short position of Polyplex (Thailand). Check out your portfolio center. Please also check ongoing floating volatility patterns of Nokian Renkaat and Polyplex (Thailand).
Diversification Opportunities for Nokian Renkaat and Polyplex (Thailand)
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Nokian and Polyplex is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Nokian Renkaat Oyj and Polyplex Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polyplex (Thailand) and Nokian Renkaat 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 Nokian Renkaat Oyj are associated (or correlated) with Polyplex (Thailand). Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polyplex (Thailand) has no effect on the direction of Nokian Renkaat i.e., Nokian Renkaat and Polyplex (Thailand) go up and down completely randomly.
Pair Corralation between Nokian Renkaat and Polyplex (Thailand)
Assuming the 90 days horizon Nokian Renkaat Oyj is expected to under-perform the Polyplex (Thailand). But the stock apears to be less risky and, when comparing its historical volatility, Nokian Renkaat Oyj is 14.58 times less risky than Polyplex (Thailand). The stock trades about -0.16 of its potential returns per unit of risk. The Polyplex Public is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 14.00 in Polyplex Public on September 1, 2024 and sell it today you would earn a total of 19.00 from holding Polyplex Public or generate 135.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nokian Renkaat Oyj vs. Polyplex Public
Performance |
| Timeline |
| Nokian Renkaat Oyj |
| Polyplex (Thailand) |
Nokian Renkaat and Polyplex (Thailand) Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nokian Renkaat and Polyplex (Thailand)
The main advantage of trading using opposite Nokian Renkaat and Polyplex (Thailand) positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nokian Renkaat position performs unexpectedly, Polyplex (Thailand) 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 Polyplex (Thailand) will offset losses from the drop in Polyplex (Thailand)'s long position.| Nokian Renkaat vs. Bridgestone | Nokian Renkaat vs. The Goodyear Tire | Nokian Renkaat vs. Sumitomo Rubber Industries | Nokian Renkaat vs. Zeon Corporation |
| Polyplex (Thailand) vs. Strategic Education | Polyplex (Thailand) vs. Xinhua Winshare Publishing | Polyplex (Thailand) vs. TAL Education Group | Polyplex (Thailand) vs. BLUESCOPE STEEL |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
Other Complementary Tools
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |