Correlation Between Nice Information and NH Investment
Can any of the company-specific risk be diversified away by investing in both Nice Information and NH Investment 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 NH Investment 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 NH Investment Securities, you can compare the effects of market volatilities on Nice Information and NH Investment 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 NH Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nice Information and NH Investment.
Diversification Opportunities for Nice Information and NH Investment
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nice and 005940 is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Nice Information Telecommunica and NH Investment Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NH Investment Securities 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 NH Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NH Investment Securities has no effect on the direction of Nice Information i.e., Nice Information and NH Investment go up and down completely randomly.
Pair Corralation between Nice Information and NH Investment
Assuming the 90 days trading horizon Nice Information Telecommunication is expected to under-perform the NH Investment. But the stock apears to be less risky and, when comparing its historical volatility, Nice Information Telecommunication is 2.14 times less risky than NH Investment. The stock trades about -0.16 of its potential returns per unit of risk. The NH Investment Securities is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 1,362,000 in NH Investment Securities on August 29, 2024 and sell it today you would lose (29,000) from holding NH Investment Securities or give up 2.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nice Information Telecommunica vs. NH Investment Securities
Performance |
| Timeline |
| Nice Information Tel |
| NH Investment Securities |
Nice Information and NH Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nice Information and NH Investment
The main advantage of trading using opposite Nice Information and NH Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nice Information position performs unexpectedly, NH Investment 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 NH Investment will offset losses from the drop in NH Investment's long position.| Nice Information vs. Korea Real Estate | Nice Information vs. Korea Ratings Co | Nice Information vs. IQuest Co | Nice Information vs. Wonbang Tech Co |
| NH Investment vs. LG Display Co | NH Investment vs. Nasmedia Co | NH Investment vs. PlayD Co | NH Investment vs. KIWI Media Group |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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