Correlation Between SH Energy and Nice Information
Can any of the company-specific risk be diversified away by investing in both SH Energy and Nice Information 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 SH Energy and Nice Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SH Energy Chemical and Nice Information Telecommunication, you can compare the effects of market volatilities on SH Energy and Nice Information 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 SH Energy with a short position of Nice Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of SH Energy and Nice Information.
Diversification Opportunities for SH Energy and Nice Information
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between 002360 and Nice is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding SH Energy Chemical and Nice Information Telecommunica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nice Information Tel and SH Energy 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 SH Energy Chemical are associated (or correlated) with Nice Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nice Information Tel has no effect on the direction of SH Energy i.e., SH Energy and Nice Information go up and down completely randomly.
Pair Corralation between SH Energy and Nice Information
Assuming the 90 days trading horizon SH Energy Chemical is expected to generate 5.43 times more return on investment than Nice Information. However, SH Energy is 5.43 times more volatile than Nice Information Telecommunication. It trades about 0.06 of its potential returns per unit of risk. Nice Information Telecommunication is currently generating about -0.11 per unit of risk. If you would invest 50,900 in SH Energy Chemical on September 1, 2024 and sell it today you would earn a total of 1,800 from holding SH Energy Chemical or generate 3.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SH Energy Chemical vs. Nice Information Telecommunica
Performance |
| Timeline |
| SH Energy Chemical |
| Nice Information Tel |
SH Energy and Nice Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SH Energy and Nice Information
The main advantage of trading using opposite SH Energy and Nice Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SH Energy position performs unexpectedly, Nice Information 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 Nice Information will offset losses from the drop in Nice Information's long position.| SH Energy vs. Air Busan Co | SH Energy vs. Jeju Air Co | SH Energy vs. Cube Entertainment | SH Energy vs. MEDIANA CoLtd |
| Nice Information vs. Dongsin Engineering Construction | Nice Information vs. Doosan Fuel Cell | Nice Information vs. Daishin Balance 1 | Nice Information vs. Total Soft Bank |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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