Correlation Between Nanoform Finland and Invisio Communications

Can any of the company-specific risk be diversified away by investing in both Nanoform Finland and Invisio Communications 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 Nanoform Finland and Invisio Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Nanoform Finland Plc and Invisio Communications AB, you can compare the effects of market volatilities on Nanoform Finland and Invisio Communications 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 Nanoform Finland with a short position of Invisio Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nanoform Finland and Invisio Communications.

Diversification Opportunities for Nanoform Finland and Invisio Communications

0.46

Correlation Coefficient

Nanoform Finland  Invisio Communications

Very weak diversification

The 3 months correlation between Nanoform and Invisio is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Nanoform Finland Plc and Invisio Communications AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invisio Communications and Nanoform Finland 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 Nanoform Finland Plc are associated (or correlated) with Invisio Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invisio Communications has no effect on the direction of Nanoform Finland i.e., Nanoform Finland and Invisio Communications go up and down completely randomly.

Pair Corralation between Nanoform Finland and Invisio Communications

Assuming the 90 days trading horizon Nanoform Finland Plc is expected to generate 2.67 times more return on investment than Invisio Communications. However, Nanoform Finland is 2.67 times more volatile than Invisio Communications AB. It trades about 0.03 of its potential returns per unit of risk. Invisio Communications AB is currently generating about 0.02 per unit of risk. If you would invest  1,156  in Nanoform Finland Plc on April 22, 2025 and sell it today you would lose (8.00) from holding Nanoform Finland Plc or give up 0.69% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Nanoform Finland Plc  vs.  Invisio Communications AB

Nanoform Finland Plc

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Nanoform Finland Plc are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Nanoform Finland may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Invisio Communications

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Invisio Communications AB are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Invisio Communications is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Nanoform Finland and Invisio Communications

The main advantage of trading using opposite Nanoform Finland and Invisio Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nanoform Finland position performs unexpectedly, Invisio Communications 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 Invisio Communications will offset losses from the drop in Invisio Communications' long position.

The idea behind Nanoform Finland Plc and Invisio Communications AB pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.