Correlation Between Nokia Oyj and HARDWARIO

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

By analyzing existing cross correlation between Nokia Oyj and HARDWARIO as, you can compare the effects of market volatilities on Nokia Oyj and HARDWARIO 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 Nokia Oyj with a short position of HARDWARIO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nokia Oyj and HARDWARIO.

Diversification Opportunities for Nokia Oyj and HARDWARIO

0.06

Correlation Coefficient

Nokia Oyj  HARDWARIO

Significant diversification

The 3 months correlation between Nokia and HARDWARIO is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Nokia Oyj and HARDWARIO as in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HARDWARIO as and Nokia 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 Nokia Oyj are associated (or correlated) with HARDWARIO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HARDWARIO as has no effect on the direction of Nokia Oyj i.e., Nokia Oyj and HARDWARIO go up and down completely randomly.

Pair Corralation between Nokia Oyj and HARDWARIO

Assuming the 90 days trading horizon Nokia Oyj is expected to under-perform the HARDWARIO. But the stock apears to be less risky and, when comparing its historical volatility, Nokia Oyj is 1.73 times less risky than HARDWARIO. The stock trades about -0.08 of its potential returns per unit of risk. The HARDWARIO as is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  1,150  in HARDWARIO as on April 24, 2025 and sell it today you would lose (100.00) from holding HARDWARIO as or give up 8.7% of portfolio value over 90 days.

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

Nokia Oyj  vs.  HARDWARIO as

Nokia Oyj

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nokia Oyj has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

HARDWARIO as

Risk-Adjusted Performance

Very Weak

Over the last 90 days HARDWARIO as has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, HARDWARIO is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Nokia Oyj and HARDWARIO

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

The idea behind Nokia Oyj and HARDWARIO as 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.

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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.