Correlation Between SCOTT TECHNOLOGY and Nokia
Can any of the company-specific risk be diversified away by investing in both SCOTT TECHNOLOGY and Nokia 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 SCOTT TECHNOLOGY and Nokia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SCOTT TECHNOLOGY and Nokia, you can compare the effects of market volatilities on SCOTT TECHNOLOGY and Nokia 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 SCOTT TECHNOLOGY with a short position of Nokia. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCOTT TECHNOLOGY and Nokia.
Diversification Opportunities for SCOTT TECHNOLOGY and Nokia
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SCOTT and Nokia is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding SCOTT TECHNOLOGY and Nokia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nokia and SCOTT TECHNOLOGY 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 SCOTT TECHNOLOGY are associated (or correlated) with Nokia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nokia has no effect on the direction of SCOTT TECHNOLOGY i.e., SCOTT TECHNOLOGY and Nokia go up and down completely randomly.
Pair Corralation between SCOTT TECHNOLOGY and Nokia
Assuming the 90 days trading horizon SCOTT TECHNOLOGY is expected to generate 1.85 times more return on investment than Nokia. However, SCOTT TECHNOLOGY is 1.85 times more volatile than Nokia. It trades about 0.19 of its potential returns per unit of risk. Nokia is currently generating about -0.25 per unit of risk. If you would invest 122.00 in SCOTT TECHNOLOGY on September 2, 2024 and sell it today you would earn a total of 14.00 from holding SCOTT TECHNOLOGY or generate 11.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SCOTT TECHNOLOGY vs. Nokia
Performance |
| Timeline |
| SCOTT TECHNOLOGY |
| Nokia |
SCOTT TECHNOLOGY and Nokia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SCOTT TECHNOLOGY and Nokia
The main advantage of trading using opposite SCOTT TECHNOLOGY and Nokia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCOTT TECHNOLOGY position performs unexpectedly, Nokia 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 will offset losses from the drop in Nokia's long position.| SCOTT TECHNOLOGY vs. SIVERS SEMICONDUCTORS AB | SCOTT TECHNOLOGY vs. Darden Restaurants | SCOTT TECHNOLOGY vs. Reliance Steel Aluminum | SCOTT TECHNOLOGY vs. Q2M Managementberatung AG |
| Nokia vs. Tsingtao Brewery | Nokia vs. Merit Medical Systems | Nokia vs. SAFETY MEDICAL PROD | Nokia vs. Avanos Medical |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
Other Complementary Tools
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |