Correlation Between Photon Energy and Nokia Oyj
Can any of the company-specific risk be diversified away by investing in both Photon Energy and Nokia Oyj 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 Photon Energy and Nokia Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Photon Energy NV and Nokia Oyj, you can compare the effects of market volatilities on Photon Energy and Nokia Oyj 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 Photon Energy with a short position of Nokia Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Photon Energy and Nokia Oyj.
Diversification Opportunities for Photon Energy and Nokia Oyj
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Photon and Nokia is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Photon Energy NV and Nokia Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nokia Oyj and Photon Energy 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 Photon Energy NV are associated (or correlated) with Nokia Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nokia Oyj has no effect on the direction of Photon Energy i.e., Photon Energy and Nokia Oyj go up and down completely randomly.
Pair Corralation between Photon Energy and Nokia Oyj
Assuming the 90 days trading horizon Photon Energy NV is expected to under-perform the Nokia Oyj. In addition to that, Photon Energy is 1.71 times more volatile than Nokia Oyj. It trades about -0.22 of its total potential returns per unit of risk. Nokia Oyj is currently generating about -0.15 per unit of volatility. If you would invest 10,920 in Nokia Oyj on September 1, 2024 and sell it today you would lose (756.00) from holding Nokia Oyj or give up 6.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Photon Energy NV vs. Nokia Oyj
Performance |
| Timeline |
| Photon Energy NV |
| Nokia Oyj |
Photon Energy and Nokia Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Photon Energy and Nokia Oyj
The main advantage of trading using opposite Photon Energy and Nokia Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Photon Energy position performs unexpectedly, Nokia Oyj 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 Nokia Oyj will offset losses from the drop in Nokia Oyj's long position.| Photon Energy vs. Vienna Insurance Group | Photon Energy vs. UNIQA Insurance Group | Photon Energy vs. Moneta Money Bank |
| Nokia Oyj vs. JT ARCH INVESTMENTS | Nokia Oyj vs. Komercni Banka AS | Nokia Oyj vs. UNIQA Insurance Group | Nokia Oyj vs. Vienna Insurance Group |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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