Correlation Between Nice Information and Korea Zinc
Can any of the company-specific risk be diversified away by investing in both Nice Information and Korea Zinc 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 Zinc 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 Zinc, you can compare the effects of market volatilities on Nice Information and Korea Zinc 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 Zinc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nice Information and Korea Zinc.
Diversification Opportunities for Nice Information and Korea Zinc
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Nice and Korea is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Nice Information Telecommunica and Korea Zinc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Zinc 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 Zinc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Zinc has no effect on the direction of Nice Information i.e., Nice Information and Korea Zinc go up and down completely randomly.
Pair Corralation between Nice Information and Korea Zinc
Assuming the 90 days trading horizon Nice Information Telecommunication is expected to generate 0.32 times more return on investment than Korea Zinc. However, Nice Information Telecommunication is 3.11 times less risky than Korea Zinc. It trades about -0.23 of its potential returns per unit of risk. Korea Zinc is currently generating about -0.51 per unit of risk. If you would invest 1,831,000 in Nice Information Telecommunication on October 25, 2024 and sell it today you would lose (70,000) from holding Nice Information Telecommunication or give up 3.82% 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. Korea Zinc
Performance |
| Timeline |
| Nice Information Tel |
| Korea Zinc |
Nice Information and Korea Zinc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nice Information and Korea Zinc
The main advantage of trading using opposite Nice Information and Korea Zinc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nice Information position performs unexpectedly, Korea Zinc 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 Zinc will offset losses from the drop in Korea Zinc's long position.| Nice Information vs. Samsung Electronics Co | Nice Information vs. Samsung Electronics Co | Nice Information vs. SK Hynix | Nice Information vs. HMM Co |
| Korea Zinc vs. Handok Clean Tech | Korea Zinc vs. Cube Entertainment | Korea Zinc vs. SKONEC Entertainment Co | Korea Zinc vs. Next Entertainment World |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |