Correlation Between NICE Information and RF Materials
Can any of the company-specific risk be diversified away by investing in both NICE Information and RF Materials 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 RF Materials 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 RF Materials Co, you can compare the effects of market volatilities on NICE Information and RF Materials 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 RF Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of NICE Information and RF Materials.
Diversification Opportunities for NICE Information and RF Materials
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NICE and 327260 is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding NICE Information Service and RF Materials Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RF Materials 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 RF Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RF Materials has no effect on the direction of NICE Information i.e., NICE Information and RF Materials go up and down completely randomly.
Pair Corralation between NICE Information and RF Materials
Assuming the 90 days trading horizon NICE Information Service is expected to generate 0.61 times more return on investment than RF Materials. However, NICE Information Service is 1.64 times less risky than RF Materials. It trades about 0.07 of its potential returns per unit of risk. RF Materials Co is currently generating about -0.08 per unit of risk. If you would invest 907,301 in NICE Information Service on September 3, 2024 and sell it today you would earn a total of 298,699 from holding NICE Information Service or generate 32.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NICE Information Service vs. RF Materials Co
Performance |
| Timeline |
| NICE Information Service |
| RF Materials |
NICE Information and RF Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NICE Information and RF Materials
The main advantage of trading using opposite NICE Information and RF Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NICE Information position performs unexpectedly, RF Materials 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 RF Materials will offset losses from the drop in RF Materials' long position.| NICE Information vs. KT Submarine Telecom | NICE Information vs. Shinil Electronics Co | NICE Information vs. Lotte Data Communication | NICE Information vs. Daeduck Electronics Co |
| RF Materials vs. SK Hynix | RF Materials vs. LX Semicon Co | RF Materials vs. Tokai Carbon Korea | RF Materials vs. People Technology |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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