Correlation Between Investment and Nitro Games

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

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

Diversification Opportunities for Investment and Nitro Games

-0.18

Correlation Coefficient

Investment  Nitro Games

Good diversification

The 3 months correlation between Investment and Nitro is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Investment AB Oresund and Nitro Games Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nitro Games Oyj and Investment 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 Investment AB Oresund are associated (or correlated) with Nitro Games. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nitro Games Oyj has no effect on the direction of Investment i.e., Investment and Nitro Games go up and down completely randomly.

Pair Corralation between Investment and Nitro Games

Assuming the 90 days trading horizon Investment AB Oresund is expected to generate 0.48 times more return on investment than Nitro Games. However, Investment AB Oresund is 2.1 times less risky than Nitro Games. It trades about 0.22 of its potential returns per unit of risk. Nitro Games Oyj is currently generating about -0.04 per unit of risk. If you would invest  11,481  in Investment AB Oresund on April 24, 2025 and sell it today you would earn a total of  1,999  from holding Investment AB Oresund or generate 17.41% return on investment over 90 days.

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

Investment AB Oresund  vs.  Nitro Games Oyj

Investment AB Oresund

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Investment AB Oresund are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Investment unveiled solid returns over the last few months and may actually be approaching a breakup point.

Nitro Games Oyj

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nitro Games Oyj has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Investment and Nitro Games

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

The idea behind Investment AB Oresund and Nitro Games Oyj 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.