Correlation Between Nice Information and BIT Computer
Can any of the company-specific risk be diversified away by investing in both Nice Information and BIT Computer 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 BIT Computer 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 BIT Computer Co, you can compare the effects of market volatilities on Nice Information and BIT Computer 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 BIT Computer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nice Information and BIT Computer.
Diversification Opportunities for Nice Information and BIT Computer
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Nice and BIT is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Nice Information Telecommunica and BIT Computer Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BIT Computer 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 BIT Computer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BIT Computer has no effect on the direction of Nice Information i.e., Nice Information and BIT Computer go up and down completely randomly.
Pair Corralation between Nice Information and BIT Computer
Assuming the 90 days trading horizon Nice Information Telecommunication is expected to under-perform the BIT Computer. But the stock apears to be less risky and, when comparing its historical volatility, Nice Information Telecommunication is 2.05 times less risky than BIT Computer. The stock trades about -0.09 of its potential returns per unit of risk. The BIT Computer Co is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 668,401 in BIT Computer Co on November 3, 2024 and sell it today you would lose (182,901) from holding BIT Computer Co or give up 27.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nice Information Telecommunica vs. BIT Computer Co
Performance |
| Timeline |
| Nice Information Tel |
| BIT Computer |
Nice Information and BIT Computer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nice Information and BIT Computer
The main advantage of trading using opposite Nice Information and BIT Computer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nice Information position performs unexpectedly, BIT Computer 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 BIT Computer will offset losses from the drop in BIT Computer'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 |
| BIT Computer vs. Dongwoo Farm To | BIT Computer vs. Cuckoo Homesys Co | BIT Computer vs. Keyang Electric Machinery | BIT Computer vs. KT Submarine Telecom |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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