Correlation Between NICE Information and BGF Retail
Can any of the company-specific risk be diversified away by investing in both NICE Information and BGF Retail 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 BGF Retail 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 BGF Retail Co, you can compare the effects of market volatilities on NICE Information and BGF Retail 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 BGF Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of NICE Information and BGF Retail.
Diversification Opportunities for NICE Information and BGF Retail
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NICE and BGF is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding NICE Information Service and BGF Retail Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BGF Retail 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 BGF Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BGF Retail has no effect on the direction of NICE Information i.e., NICE Information and BGF Retail go up and down completely randomly.
Pair Corralation between NICE Information and BGF Retail
Assuming the 90 days trading horizon NICE Information Service is expected to generate 1.69 times more return on investment than BGF Retail. However, NICE Information is 1.69 times more volatile than BGF Retail Co. It trades about 0.08 of its potential returns per unit of risk. BGF Retail Co is currently generating about -0.04 per unit of risk. If you would invest 1,196,000 in NICE Information Service on November 6, 2024 and sell it today you would earn a total of 31,000 from holding NICE Information Service or generate 2.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NICE Information Service vs. BGF Retail Co
Performance |
| Timeline |
| NICE Information Service |
| BGF Retail |
NICE Information and BGF Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NICE Information and BGF Retail
The main advantage of trading using opposite NICE Information and BGF Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NICE Information position performs unexpectedly, BGF Retail 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 BGF Retail will offset losses from the drop in BGF Retail's long position.| NICE Information vs. SCI Information Service | NICE Information vs. Lotte Data Communication | NICE Information vs. Seoul Electronics Telecom | NICE Information vs. Kisan Telecom Co |
| BGF Retail vs. Wonil Special Steel | BGF Retail vs. BooKook Steel Co | BGF Retail vs. Homecast CoLtd | BGF Retail vs. Samlip General Foods |
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 CEOs Directory module to screen CEOs from public companies around the world.
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