Correlation Between Nice Information and Kukdo Chemical
Can any of the company-specific risk be diversified away by investing in both Nice Information and Kukdo Chemical 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 Kukdo Chemical 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 Kukdo Chemical Co, you can compare the effects of market volatilities on Nice Information and Kukdo Chemical 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 Kukdo Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nice Information and Kukdo Chemical.
Diversification Opportunities for Nice Information and Kukdo Chemical
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Nice and Kukdo is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Nice Information Telecommunica and Kukdo Chemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kukdo Chemical 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 Kukdo Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kukdo Chemical has no effect on the direction of Nice Information i.e., Nice Information and Kukdo Chemical go up and down completely randomly.
Pair Corralation between Nice Information and Kukdo Chemical
Assuming the 90 days trading horizon Nice Information Telecommunication is expected to generate 0.71 times more return on investment than Kukdo Chemical. However, Nice Information Telecommunication is 1.4 times less risky than Kukdo Chemical. It trades about -0.03 of its potential returns per unit of risk. Kukdo Chemical Co is currently generating about -0.06 per unit of risk. If you would invest 2,138,492 in Nice Information Telecommunication on September 14, 2024 and sell it today you would lose (267,492) from holding Nice Information Telecommunication or give up 12.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nice Information Telecommunica vs. Kukdo Chemical Co
Performance |
| Timeline |
| Nice Information Tel |
| Kukdo Chemical |
Nice Information and Kukdo Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nice Information and Kukdo Chemical
The main advantage of trading using opposite Nice Information and Kukdo Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nice Information position performs unexpectedly, Kukdo Chemical 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 Kukdo Chemical will offset losses from the drop in Kukdo Chemical's long position.| Nice Information vs. Cube Entertainment | Nice Information vs. Dreamus Company | Nice Information vs. LG Energy Solution | Nice Information vs. Dongwon System |
| Kukdo Chemical vs. Samsung Electronics Co | Kukdo Chemical vs. Samsung Electronics Co | Kukdo Chemical vs. SK Hynix | Kukdo Chemical vs. POSCO 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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