Correlation Between Zonetail and Nokia
Can any of the company-specific risk be diversified away by investing in both Zonetail 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 Zonetail and Nokia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zonetail and Nokia, you can compare the effects of market volatilities on Zonetail 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 Zonetail with a short position of Nokia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zonetail and Nokia.
Diversification Opportunities for Zonetail and Nokia
Excellent diversification
The 3 months correlation between Zonetail and Nokia is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Zonetail and Nokia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nokia and Zonetail 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 Zonetail 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 Zonetail i.e., Zonetail and Nokia go up and down completely randomly.
Pair Corralation between Zonetail and Nokia
Assuming the 90 days horizon Zonetail is expected to generate 5.79 times more return on investment than Nokia. However, Zonetail is 5.79 times more volatile than Nokia. It trades about 0.21 of its potential returns per unit of risk. Nokia is currently generating about -0.29 per unit of risk. If you would invest 1.02 in Zonetail on September 1, 2024 and sell it today you would earn a total of 0.57 from holding Zonetail or generate 55.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zonetail vs. Nokia
Performance |
| Timeline |
| Zonetail |
| Nokia |
Zonetail and Nokia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zonetail and Nokia
The main advantage of trading using opposite Zonetail and Nokia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zonetail 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.| Zonetail vs. Waldencast Acquisition Corp | Zonetail vs. Alkami Technology | Zonetail vs. ADEIA P | Zonetail vs. Paycor HCM |
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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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