Correlation Between Nice Information and UJU Electronics
Can any of the company-specific risk be diversified away by investing in both Nice Information and UJU Electronics 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 UJU Electronics 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 UJU Electronics Co, you can compare the effects of market volatilities on Nice Information and UJU Electronics 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 UJU Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nice Information and UJU Electronics.
Diversification Opportunities for Nice Information and UJU Electronics
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Nice and UJU is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Nice Information Telecommunica and UJU Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UJU Electronics 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 UJU Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UJU Electronics has no effect on the direction of Nice Information i.e., Nice Information and UJU Electronics go up and down completely randomly.
Pair Corralation between Nice Information and UJU Electronics
Assuming the 90 days trading horizon Nice Information Telecommunication is expected to under-perform the UJU Electronics. But the stock apears to be less risky and, when comparing its historical volatility, Nice Information Telecommunication is 4.66 times less risky than UJU Electronics. The stock trades about -0.36 of its potential returns per unit of risk. The UJU Electronics Co is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 1,762,000 in UJU Electronics Co on November 4, 2024 and sell it today you would earn a total of 338,000 from holding UJU Electronics Co or generate 19.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nice Information Telecommunica vs. UJU Electronics Co
Performance |
| Timeline |
| Nice Information Tel |
| UJU Electronics |
Nice Information and UJU Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nice Information and UJU Electronics
The main advantage of trading using opposite Nice Information and UJU Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nice Information position performs unexpectedly, UJU Electronics 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 UJU Electronics will offset losses from the drop in UJU Electronics' 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 |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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