Correlation Between Nice Information and Korea Steel
Can any of the company-specific risk be diversified away by investing in both Nice Information and Korea Steel 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 Korea Steel 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 Korea Steel Co, you can compare the effects of market volatilities on Nice Information and Korea Steel 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 Korea Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nice Information and Korea Steel.
Diversification Opportunities for Nice Information and Korea Steel
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nice and Korea is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Nice Information Telecommunica and Korea Steel Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Steel 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 Korea Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Steel has no effect on the direction of Nice Information i.e., Nice Information and Korea Steel go up and down completely randomly.
Pair Corralation between Nice Information and Korea Steel
Assuming the 90 days trading horizon Nice Information Telecommunication is expected to under-perform the Korea Steel. But the stock apears to be less risky and, when comparing its historical volatility, Nice Information Telecommunication is 1.76 times less risky than Korea Steel. The stock trades about -0.09 of its potential returns per unit of risk. The Korea Steel Co is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 160,700 in Korea Steel Co on October 26, 2024 and sell it today you would earn a total of 4,000 from holding Korea Steel Co or generate 2.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nice Information Telecommunica vs. Korea Steel Co
Performance |
| Timeline |
| Nice Information Tel |
| Korea Steel |
Nice Information and Korea Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nice Information and Korea Steel
The main advantage of trading using opposite Nice Information and Korea Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nice Information position performs unexpectedly, Korea Steel 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 Korea Steel will offset losses from the drop in Korea Steel's long position.| Nice Information vs. Soulbrain Holdings Co | Nice Information vs. NICE Total Cash | Nice Information vs. Geumhwa Plant Service | Nice Information vs. AfreecaTV Co |
| Korea Steel vs. Automobile Pc | Korea Steel vs. Lotte Non Life Insurance | Korea Steel vs. Samsung Life Insurance | Korea Steel 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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