Correlation Between NICE Information and KakaoBank Corp
Can any of the company-specific risk be diversified away by investing in both NICE Information and KakaoBank Corp 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 KakaoBank Corp 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 KakaoBank Corp, you can compare the effects of market volatilities on NICE Information and KakaoBank Corp 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 KakaoBank Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of NICE Information and KakaoBank Corp.
Diversification Opportunities for NICE Information and KakaoBank Corp
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NICE and KakaoBank is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding NICE Information Service and KakaoBank Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KakaoBank Corp 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 KakaoBank Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KakaoBank Corp has no effect on the direction of NICE Information i.e., NICE Information and KakaoBank Corp go up and down completely randomly.
Pair Corralation between NICE Information and KakaoBank Corp
Assuming the 90 days trading horizon NICE Information Service is expected to generate 0.85 times more return on investment than KakaoBank Corp. However, NICE Information Service is 1.17 times less risky than KakaoBank Corp. It trades about -0.06 of its potential returns per unit of risk. KakaoBank Corp is currently generating about -0.25 per unit of risk. If you would invest 1,178,000 in NICE Information Service on October 13, 2024 and sell it today you would lose (28,000) from holding NICE Information Service or give up 2.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NICE Information Service vs. KakaoBank Corp
Performance |
| Timeline |
| NICE Information Service |
| KakaoBank Corp |
NICE Information and KakaoBank Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NICE Information and KakaoBank Corp
The main advantage of trading using opposite NICE Information and KakaoBank Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NICE Information position performs unexpectedly, KakaoBank Corp 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 KakaoBank Corp will offset losses from the drop in KakaoBank Corp's long position.| NICE Information vs. Shinsegae Engineering Construction | NICE Information vs. KT Submarine Telecom | NICE Information vs. Dongbang Ship Machinery | NICE Information vs. Seoul Electronics Telecom |
| KakaoBank Corp vs. Korean Drug Co | KakaoBank Corp vs. Nice Information Telecommunication | KakaoBank Corp vs. Daou Data Corp | KakaoBank Corp vs. Daishin Information Communications |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |