Correlation Between Impinj and Nokia

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

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

Diversification Opportunities for Impinj and Nokia

-0.06

Correlation Coefficient

Impinj  Nokia

Good diversification

The 3 months correlation between Impinj and Nokia is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Impinj Inc and Nokia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nokia and Impinj 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 Impinj Inc 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 Impinj i.e., Impinj and Nokia go up and down completely randomly.

Pair Corralation between Impinj and Nokia

Allowing for the 90-day total investment horizon Impinj Inc is expected to under-perform the Nokia. But the stock apears to be less risky and, when comparing its historical volatility, Impinj Inc is 1.24 times less risky than Nokia. The stock trades about -0.07 of its potential returns per unit of risk. The Nokia is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  349.00  in Nokia on January 26, 2024 and sell it today you would earn a total of  7.00  from holding Nokia or generate 2.01% return on investment over 90 days.

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

Impinj Inc  vs.  Nokia

Impinj Inc

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Impinj Inc are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady forward indicators, Impinj demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Nokia

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nokia has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental drivers, Nokia is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Impinj and Nokia

The main advantage of trading using opposite Impinj and Nokia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Impinj 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.

The idea behind Impinj Inc and Nokia 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.