Correlation Between Vaisala Oyj and Nexstim Oyj
Can any of the company-specific risk be diversified away by investing in both Vaisala Oyj and Nexstim 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 Vaisala Oyj and Nexstim Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vaisala Oyj A and Nexstim Oyj, you can compare the effects of market volatilities on Vaisala Oyj and Nexstim 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 Vaisala Oyj with a short position of Nexstim Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vaisala Oyj and Nexstim Oyj.
Diversification Opportunities for Vaisala Oyj and Nexstim Oyj
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Vaisala and Nexstim is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Vaisala Oyj A and Nexstim Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nexstim Oyj and Vaisala 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 Vaisala Oyj A are associated (or correlated) with Nexstim Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nexstim Oyj has no effect on the direction of Vaisala Oyj i.e., Vaisala Oyj and Nexstim Oyj go up and down completely randomly.
Pair Corralation between Vaisala Oyj and Nexstim Oyj
Assuming the 90 days trading horizon Vaisala Oyj is expected to generate 1.75 times less return on investment than Nexstim Oyj. But when comparing it to its historical volatility, Vaisala Oyj A is 1.79 times less risky than Nexstim Oyj. It trades about 0.03 of its potential returns per unit of risk. Nexstim Oyj is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 420.00 in Nexstim Oyj on August 27, 2024 and sell it today you would earn a total of 88.00 from holding Nexstim Oyj or generate 20.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vaisala Oyj A vs. Nexstim Oyj
Performance |
| Timeline |
| Vaisala Oyj A |
| Nexstim Oyj |
Vaisala Oyj and Nexstim Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vaisala Oyj and Nexstim Oyj
The main advantage of trading using opposite Vaisala Oyj and Nexstim Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vaisala Oyj position performs unexpectedly, Nexstim 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 Nexstim Oyj will offset losses from the drop in Nexstim Oyj's long position.| Vaisala Oyj vs. Innofactor Oyj | Vaisala Oyj vs. CapMan Oyj B | Vaisala Oyj vs. HKFoods Oyj A | Vaisala Oyj vs. KONE Oyj |
| Nexstim Oyj vs. Telia Company AB | Nexstim Oyj vs. Wartsila Oyj Abp | Nexstim Oyj vs. Tokmanni Group Oyj | Nexstim Oyj vs. YIT 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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