Correlation Between Nice Information and Sung Bo
Can any of the company-specific risk be diversified away by investing in both Nice Information and Sung Bo 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 Sung Bo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nice Information Telecommunication and Sung Bo Chemicals, you can compare the effects of market volatilities on Nice Information and Sung Bo 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 Sung Bo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nice Information and Sung Bo.
Diversification Opportunities for Nice Information and Sung Bo
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Nice and Sung is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Nice Information Telecommunica and Sung Bo Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sung Bo Chemicals 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 Telecommunication are associated (or correlated) with Sung Bo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sung Bo Chemicals has no effect on the direction of Nice Information i.e., Nice Information and Sung Bo go up and down completely randomly.
Pair Corralation between Nice Information and Sung Bo
Assuming the 90 days trading horizon Nice Information Telecommunication is expected to under-perform the Sung Bo. But the stock apears to be less risky and, when comparing its historical volatility, Nice Information Telecommunication is 1.2 times less risky than Sung Bo. The stock trades about -0.09 of its potential returns per unit of risk. The Sung Bo Chemicals is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 240,735 in Sung Bo Chemicals on October 11, 2024 and sell it today you would earn a total of 13,265 from holding Sung Bo Chemicals or generate 5.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nice Information Telecommunica vs. Sung Bo Chemicals
Performance |
| Timeline |
| Nice Information Tel |
| Sung Bo Chemicals |
Nice Information and Sung Bo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nice Information and Sung Bo
The main advantage of trading using opposite Nice Information and Sung Bo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nice Information position performs unexpectedly, Sung Bo 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 Sung Bo will offset losses from the drop in Sung Bo's long position.| Nice Information vs. Soulbrain Holdings Co | Nice Information vs. NICE Total Cash | Nice Information vs. Geumhwa Plant Service |
| Sung Bo vs. Coloray International Investment | Sung Bo vs. Golden Bridge Investment | Sung Bo vs. Automobile Pc | Sung Bo vs. Korea Investment Holdings |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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