Correlation Between NICE Information and KT Submarine
Can any of the company-specific risk be diversified away by investing in both NICE Information and KT Submarine 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 KT Submarine 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 KT Submarine Telecom, you can compare the effects of market volatilities on NICE Information and KT Submarine 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 KT Submarine. Check out your portfolio center. Please also check ongoing floating volatility patterns of NICE Information and KT Submarine.
Diversification Opportunities for NICE Information and KT Submarine
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NICE and 060370 is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding NICE Information Service and KT Submarine Telecom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KT Submarine Telecom 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 KT Submarine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KT Submarine Telecom has no effect on the direction of NICE Information i.e., NICE Information and KT Submarine go up and down completely randomly.
Pair Corralation between NICE Information and KT Submarine
Assuming the 90 days trading horizon NICE Information is expected to generate 1.28 times less return on investment than KT Submarine. But when comparing it to its historical volatility, NICE Information Service is 1.46 times less risky than KT Submarine. It trades about 0.14 of its potential returns per unit of risk. KT Submarine Telecom is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 1,572,000 in KT Submarine Telecom on November 8, 2024 and sell it today you would earn a total of 96,000 from holding KT Submarine Telecom or generate 6.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NICE Information Service vs. KT Submarine Telecom
Performance |
| Timeline |
| NICE Information Service |
| KT Submarine Telecom |
NICE Information and KT Submarine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NICE Information and KT Submarine
The main advantage of trading using opposite NICE Information and KT Submarine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NICE Information position performs unexpectedly, KT Submarine 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 KT Submarine will offset losses from the drop in KT Submarine's long position.| NICE Information vs. Sung Bo Chemicals | NICE Information vs. System and Application | NICE Information vs. Shinsegae Food | NICE Information vs. Haitai Confectionery Foods |
| KT Submarine vs. CG Hi Tech | KT Submarine vs. Polaris Office Corp | KT Submarine vs. RFTech Co | KT Submarine vs. Hankook Furniture Co |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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