Correlation Between NICE Information and Samyung Trading
Can any of the company-specific risk be diversified away by investing in both NICE Information and Samyung Trading 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 Samyung Trading 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 Samyung Trading Co, you can compare the effects of market volatilities on NICE Information and Samyung Trading 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 Samyung Trading. Check out your portfolio center. Please also check ongoing floating volatility patterns of NICE Information and Samyung Trading.
Diversification Opportunities for NICE Information and Samyung Trading
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NICE and Samyung is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding NICE Information Service and Samyung Trading Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samyung Trading 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 Samyung Trading. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samyung Trading has no effect on the direction of NICE Information i.e., NICE Information and Samyung Trading go up and down completely randomly.
Pair Corralation between NICE Information and Samyung Trading
Assuming the 90 days trading horizon NICE Information is expected to generate 1.06 times less return on investment than Samyung Trading. In addition to that, NICE Information is 2.47 times more volatile than Samyung Trading Co. It trades about 0.16 of its total potential returns per unit of risk. Samyung Trading Co is currently generating about 0.42 per unit of volatility. If you would invest 1,265,000 in Samyung Trading Co on December 10, 2024 and sell it today you would earn a total of 82,000 from holding Samyung Trading Co or generate 6.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NICE Information Service vs. Samyung Trading Co
Performance |
| Timeline |
| NICE Information Service |
| Samyung Trading |
NICE Information and Samyung Trading Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NICE Information and Samyung Trading
The main advantage of trading using opposite NICE Information and Samyung Trading positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NICE Information position performs unexpectedly, Samyung Trading 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 Samyung Trading will offset losses from the drop in Samyung Trading's long position.| NICE Information vs. Daishin Information Communications | NICE Information vs. Inzi Display CoLtd | NICE Information vs. Handok Clean Tech | NICE Information vs. Sangsin Energy Display |
| Samyung Trading vs. INFINITT Healthcare Co | Samyung Trading vs. Bookook Steel | Samyung Trading vs. FOODWELL Co | Samyung Trading vs. Histeel |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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