Correlation Between NICE Information and InnoTherapy
Can any of the company-specific risk be diversified away by investing in both NICE Information and InnoTherapy 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 InnoTherapy 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 InnoTherapy, you can compare the effects of market volatilities on NICE Information and InnoTherapy 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 InnoTherapy. Check out your portfolio center. Please also check ongoing floating volatility patterns of NICE Information and InnoTherapy.
Diversification Opportunities for NICE Information and InnoTherapy
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NICE and InnoTherapy is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding NICE Information Service and InnoTherapy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InnoTherapy 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 InnoTherapy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of InnoTherapy has no effect on the direction of NICE Information i.e., NICE Information and InnoTherapy go up and down completely randomly.
Pair Corralation between NICE Information and InnoTherapy
Assuming the 90 days trading horizon NICE Information Service is expected to generate 1.07 times more return on investment than InnoTherapy. However, NICE Information is 1.07 times more volatile than InnoTherapy. It trades about 0.11 of its potential returns per unit of risk. InnoTherapy is currently generating about 0.09 per unit of risk. If you would invest 1,144,000 in NICE Information Service on September 2, 2024 and sell it today you would earn a total of 62,000 from holding NICE Information Service or generate 5.42% 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. InnoTherapy
Performance |
| Timeline |
| NICE Information Service |
| InnoTherapy |
NICE Information and InnoTherapy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NICE Information and InnoTherapy
The main advantage of trading using opposite NICE Information and InnoTherapy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NICE Information position performs unexpectedly, InnoTherapy 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 InnoTherapy will offset losses from the drop in InnoTherapy's long position.| NICE Information vs. AptaBio Therapeutics | NICE Information vs. Daewoo SBI SPAC | NICE Information vs. Dream Security co | NICE Information vs. Microfriend |
| InnoTherapy vs. Nable Communications | InnoTherapy vs. Korea Computer | InnoTherapy vs. Jinro Distillers Co | InnoTherapy vs. Homecast CoLtd |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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