Correlation Between NICE Information and SH Energy
Can any of the company-specific risk be diversified away by investing in both NICE Information and SH Energy 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 NICE Information and SH Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NICE Information Service and SH Energy Chemical, you can compare the effects of market volatilities on NICE Information and SH Energy 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 NICE Information with a short position of SH Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of NICE Information and SH Energy.
Diversification Opportunities for NICE Information and SH Energy
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between NICE and 002360 is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding NICE Information Service and SH Energy Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SH Energy Chemical and NICE Information 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 NICE Information Service are associated (or correlated) with SH Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SH Energy Chemical has no effect on the direction of NICE Information i.e., NICE Information and SH Energy go up and down completely randomly.
Pair Corralation between NICE Information and SH Energy
Assuming the 90 days trading horizon NICE Information Service is expected to generate 0.82 times more return on investment than SH Energy. However, NICE Information Service is 1.22 times less risky than SH Energy. It trades about 0.01 of its potential returns per unit of risk. SH Energy Chemical is currently generating about -0.03 per unit of risk. If you would invest 1,252,802 in NICE Information Service on October 28, 2024 and sell it today you would earn a total of 7,198 from holding NICE Information Service or generate 0.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NICE Information Service vs. SH Energy Chemical
Performance |
| Timeline |
| NICE Information Service |
| SH Energy Chemical |
NICE Information and SH Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NICE Information and SH Energy
The main advantage of trading using opposite NICE Information and SH Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NICE Information position performs unexpectedly, SH Energy 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 SH Energy will offset losses from the drop in SH Energy's long position.| NICE Information vs. Aprogen Healthcare Games | NICE Information vs. DoubleU Games Co | NICE Information vs. Hanjin Transportation Co | NICE Information vs. Foodnamoo |
| SH Energy vs. Samyoung Electronics Co | SH Energy vs. Seohee Construction Co | SH Energy vs. Camus Engineering Construction | SH Energy vs. Dongbang Ship Machinery |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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