Correlation Between NICE Information and Daesung Hi
Can any of the company-specific risk be diversified away by investing in both NICE Information and Daesung Hi 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 Daesung Hi 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 Daesung Hi Tech Co, you can compare the effects of market volatilities on NICE Information and Daesung Hi 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 Daesung Hi. Check out your portfolio center. Please also check ongoing floating volatility patterns of NICE Information and Daesung Hi.
Diversification Opportunities for NICE Information and Daesung Hi
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NICE and Daesung is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding NICE Information Service and Daesung Hi Tech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daesung Hi Tech 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 Daesung Hi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daesung Hi Tech has no effect on the direction of NICE Information i.e., NICE Information and Daesung Hi go up and down completely randomly.
Pair Corralation between NICE Information and Daesung Hi
Assuming the 90 days trading horizon NICE Information Service is expected to generate 0.57 times more return on investment than Daesung Hi. However, NICE Information Service is 1.75 times less risky than Daesung Hi. It trades about 0.05 of its potential returns per unit of risk. Daesung Hi Tech Co is currently generating about -0.08 per unit of risk. If you would invest 1,047,000 in NICE Information Service on November 3, 2024 and sell it today you would earn a total of 180,000 from holding NICE Information Service or generate 17.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.58% |
| Values | Daily Returns |
NICE Information Service vs. Daesung Hi Tech Co
Performance |
| Timeline |
| NICE Information Service |
| Daesung Hi Tech |
NICE Information and Daesung Hi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NICE Information and Daesung Hi
The main advantage of trading using opposite NICE Information and Daesung Hi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NICE Information position performs unexpectedly, Daesung Hi 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 Daesung Hi will offset losses from the drop in Daesung Hi's long position.| NICE Information vs. Wonil Special Steel | NICE Information vs. Hyundai BNG Steel | NICE Information vs. Cuckoo Homesys Co | NICE Information vs. Hyundai Home Shopping |
| Daesung Hi vs. Lotte Data Communication | Daesung Hi vs. Hanjin Transportation Co | Daesung Hi vs. Bookook Steel | Daesung Hi vs. Fine Besteel 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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