Correlation Between NICE Information and EyeGene
Can any of the company-specific risk be diversified away by investing in both NICE Information and EyeGene 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 EyeGene 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 EyeGene, you can compare the effects of market volatilities on NICE Information and EyeGene 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 EyeGene. Check out your portfolio center. Please also check ongoing floating volatility patterns of NICE Information and EyeGene.
Diversification Opportunities for NICE Information and EyeGene
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NICE and EyeGene is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding NICE Information Service and EyeGene in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EyeGene 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 EyeGene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EyeGene has no effect on the direction of NICE Information i.e., NICE Information and EyeGene go up and down completely randomly.
Pair Corralation between NICE Information and EyeGene
Assuming the 90 days trading horizon NICE Information Service is expected to generate 1.26 times more return on investment than EyeGene. However, NICE Information is 1.26 times more volatile than EyeGene. It trades about 0.08 of its potential returns per unit of risk. EyeGene is currently generating about -0.09 per unit of risk. If you would invest 1,150,000 in NICE Information Service on September 4, 2024 and sell it today you would earn a total of 43,000 from holding NICE Information Service or generate 3.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NICE Information Service vs. EyeGene
Performance |
| Timeline |
| NICE Information Service |
| EyeGene |
NICE Information and EyeGene Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NICE Information and EyeGene
The main advantage of trading using opposite NICE Information and EyeGene positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NICE Information position performs unexpectedly, EyeGene 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 EyeGene will offset losses from the drop in EyeGene's long position.| NICE Information vs. Settlebank | NICE Information vs. Woori Technology | NICE Information vs. Haitai Confectionery Foods | NICE Information vs. Puloon Technology |
| EyeGene vs. NICE Information Service | EyeGene vs. Pureun Mutual Savings | EyeGene vs. System and Application | EyeGene vs. Jb Financial |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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