Correlation Between Viafin Service and Nexstim Oyj
Can any of the company-specific risk be diversified away by investing in both Viafin Service 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 Viafin Service and Nexstim Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Viafin Service Oyj and Nexstim Oyj, you can compare the effects of market volatilities on Viafin Service 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 Viafin Service with a short position of Nexstim Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Viafin Service and Nexstim Oyj.
Diversification Opportunities for Viafin Service and Nexstim Oyj
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Viafin and Nexstim is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Viafin Service Oyj and Nexstim Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nexstim Oyj and Viafin Service 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 Viafin Service Oyj 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 Viafin Service i.e., Viafin Service and Nexstim Oyj go up and down completely randomly.
Pair Corralation between Viafin Service and Nexstim Oyj
Assuming the 90 days trading horizon Viafin Service is expected to generate 1.05 times less return on investment than Nexstim Oyj. But when comparing it to its historical volatility, Viafin Service Oyj is 2.11 times less risky than Nexstim Oyj. It trades about 0.06 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 23, 2024 and sell it today you would earn a total of 96.00 from holding Nexstim Oyj or generate 22.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Viafin Service Oyj vs. Nexstim Oyj
Performance |
| Timeline |
| Viafin Service Oyj |
| Nexstim Oyj |
Viafin Service and Nexstim Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Viafin Service and Nexstim Oyj
The main advantage of trading using opposite Viafin Service and Nexstim Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Viafin Service 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.| Viafin Service vs. Elecster Oyj A | Viafin Service vs. Vaisala Oyj A | Viafin Service vs. Nokian Renkaat Oyj | Viafin Service vs. CapMan Oyj B |
| Nexstim Oyj vs. Tokmanni Group Oyj | Nexstim Oyj vs. Kamux Suomi Oy | Nexstim Oyj vs. Vaisala Oyj A | Nexstim Oyj vs. Nokian Renkaat 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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