Correlation Between NICE Information and Kmw
Can any of the company-specific risk be diversified away by investing in both NICE Information and Kmw 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 Kmw 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 Kmw Inc, you can compare the effects of market volatilities on NICE Information and Kmw 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 Kmw. Check out your portfolio center. Please also check ongoing floating volatility patterns of NICE Information and Kmw.
Diversification Opportunities for NICE Information and Kmw
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NICE and Kmw is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding NICE Information Service and Kmw Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kmw Inc 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 Kmw. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kmw Inc has no effect on the direction of NICE Information i.e., NICE Information and Kmw go up and down completely randomly.
Pair Corralation between NICE Information and Kmw
Assuming the 90 days trading horizon NICE Information Service is expected to generate 0.55 times more return on investment than Kmw. However, NICE Information Service is 1.83 times less risky than Kmw. It trades about 0.01 of its potential returns per unit of risk. Kmw Inc is currently generating about -0.04 per unit of risk. If you would invest 1,208,299 in NICE Information Service on October 15, 2024 and sell it today you would lose (58,299) from holding NICE Information Service or give up 4.82% 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. Kmw Inc
Performance |
| Timeline |
| NICE Information Service |
| Kmw Inc |
NICE Information and Kmw Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NICE Information and Kmw
The main advantage of trading using opposite NICE Information and Kmw positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NICE Information position performs unexpectedly, Kmw 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 Kmw will offset losses from the drop in Kmw's long position.| NICE Information vs. Woori Financial Group | NICE Information vs. Jb Financial | NICE Information vs. Nh Investment And | NICE Information vs. Hyundai Heavy Industries |
| Kmw vs. KMH Hitech Co | Kmw vs. GemVaxKAEL CoLtd | Kmw vs. Bosung Power Technology | Kmw vs. Busan Industrial Co |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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