Correlation Between Nice Information and Jeju Bank
Can any of the company-specific risk be diversified away by investing in both Nice Information and Jeju Bank 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 Jeju Bank 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 Jeju Bank, you can compare the effects of market volatilities on Nice Information and Jeju Bank 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 Jeju Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nice Information and Jeju Bank.
Diversification Opportunities for Nice Information and Jeju Bank
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Nice and Jeju is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Nice Information Telecommunica and Jeju Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jeju Bank 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 Jeju Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jeju Bank has no effect on the direction of Nice Information i.e., Nice Information and Jeju Bank go up and down completely randomly.
Pair Corralation between Nice Information and Jeju Bank
Assuming the 90 days trading horizon Nice Information Telecommunication is expected to generate 0.5 times more return on investment than Jeju Bank. However, Nice Information Telecommunication is 2.02 times less risky than Jeju Bank. It trades about -0.12 of its potential returns per unit of risk. Jeju Bank is currently generating about -0.09 per unit of risk. If you would invest 2,170,000 in Nice Information Telecommunication on October 17, 2024 and sell it today you would lose (382,000) from holding Nice Information Telecommunication or give up 17.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nice Information Telecommunica vs. Jeju Bank
Performance |
| Timeline |
| Nice Information Tel |
| Jeju Bank |
Nice Information and Jeju Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nice Information and Jeju Bank
The main advantage of trading using opposite Nice Information and Jeju Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nice Information position performs unexpectedly, Jeju Bank 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 Jeju Bank will offset losses from the drop in Jeju Bank's long position.| Nice Information vs. Soulbrain Holdings Co | Nice Information vs. NICE Total Cash | Nice Information vs. Geumhwa Plant Service |
| Jeju Bank vs. System and Application | Jeju Bank vs. Daishin Information Communications | Jeju Bank vs. Korea Information Engineering | Jeju Bank vs. Nice Information Telecommunication |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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