Correlation Between Nuscale Power and Kone Oyj
Can any of the company-specific risk be diversified away by investing in both Nuscale Power and Kone 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 Nuscale Power and Kone Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nuscale Power Corp and Kone Oyj ADR, you can compare the effects of market volatilities on Nuscale Power and Kone 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 Nuscale Power with a short position of Kone Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuscale Power and Kone Oyj.
Diversification Opportunities for Nuscale Power and Kone Oyj
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Nuscale and Kone is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Nuscale Power Corp and Kone Oyj ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kone Oyj ADR and Nuscale Power 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 Nuscale Power Corp are associated (or correlated) with Kone Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kone Oyj ADR has no effect on the direction of Nuscale Power i.e., Nuscale Power and Kone Oyj go up and down completely randomly.
Pair Corralation between Nuscale Power and Kone Oyj
Considering the 90-day investment horizon Nuscale Power Corp is expected to generate 4.47 times more return on investment than Kone Oyj. However, Nuscale Power is 4.47 times more volatile than Kone Oyj ADR. It trades about 0.22 of its potential returns per unit of risk. Kone Oyj ADR is currently generating about -0.13 per unit of risk. If you would invest 2,080 in Nuscale Power Corp on August 31, 2024 and sell it today you would earn a total of 726.00 from holding Nuscale Power Corp or generate 34.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nuscale Power Corp vs. Kone Oyj ADR
Performance |
| Timeline |
| Nuscale Power Corp |
| Kone Oyj ADR |
Nuscale Power and Kone Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nuscale Power and Kone Oyj
The main advantage of trading using opposite Nuscale Power and Kone Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuscale Power position performs unexpectedly, Kone 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 Kone Oyj will offset losses from the drop in Kone Oyj's long position.| Nuscale Power vs. Cummins | Nuscale Power vs. Chart Industries | Nuscale Power vs. GE Aerospace | Nuscale Power vs. Nel ASA |
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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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