Correlation Between Nice Information and Dongil Technology
Can any of the company-specific risk be diversified away by investing in both Nice Information and Dongil Technology 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 Dongil Technology 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 Dongil Technology, you can compare the effects of market volatilities on Nice Information and Dongil Technology 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 Dongil Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nice Information and Dongil Technology.
Diversification Opportunities for Nice Information and Dongil Technology
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Nice and Dongil is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Nice Information Telecommunica and Dongil Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongil Technology 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 Dongil Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongil Technology has no effect on the direction of Nice Information i.e., Nice Information and Dongil Technology go up and down completely randomly.
Pair Corralation between Nice Information and Dongil Technology
Assuming the 90 days trading horizon Nice Information Telecommunication is expected to generate 0.53 times more return on investment than Dongil Technology. However, Nice Information Telecommunication is 1.88 times less risky than Dongil Technology. It trades about -0.3 of its potential returns per unit of risk. Dongil Technology is currently generating about -0.24 per unit of risk. If you would invest 1,899,000 in Nice Information Telecommunication on September 3, 2024 and sell it today you would lose (58,000) from holding Nice Information Telecommunication or give up 3.05% 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. Dongil Technology
Performance |
| Timeline |
| Nice Information Tel |
| Dongil Technology |
Nice Information and Dongil Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nice Information and Dongil Technology
The main advantage of trading using opposite Nice Information and Dongil Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nice Information position performs unexpectedly, Dongil Technology 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 Dongil Technology will offset losses from the drop in Dongil Technology'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 |
| Dongil Technology vs. Dongsin Engineering Construction | Dongil Technology vs. Doosan Fuel Cell | Dongil Technology vs. Daishin Balance 1 | Dongil Technology vs. Total Soft Bank |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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