Correlation Between Nice Information and ChipsMedia
Can any of the company-specific risk be diversified away by investing in both Nice Information and ChipsMedia 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 ChipsMedia 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 ChipsMedia, you can compare the effects of market volatilities on Nice Information and ChipsMedia 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 ChipsMedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nice Information and ChipsMedia.
Diversification Opportunities for Nice Information and ChipsMedia
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Nice and ChipsMedia is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Nice Information Telecommunica and ChipsMedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ChipsMedia 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 ChipsMedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ChipsMedia has no effect on the direction of Nice Information i.e., Nice Information and ChipsMedia go up and down completely randomly.
Pair Corralation between Nice Information and ChipsMedia
Assuming the 90 days trading horizon Nice Information Telecommunication is expected to under-perform the ChipsMedia. But the stock apears to be less risky and, when comparing its historical volatility, Nice Information Telecommunication is 5.82 times less risky than ChipsMedia. The stock trades about -0.37 of its potential returns per unit of risk. The ChipsMedia is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 1,657,000 in ChipsMedia on November 7, 2024 and sell it today you would earn a total of 307,000 from holding ChipsMedia or generate 18.53% 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. ChipsMedia
Performance |
| Timeline |
| Nice Information Tel |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| ChipsMedia |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
Nice Information and ChipsMedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nice Information and ChipsMedia
The main advantage of trading using opposite Nice Information and ChipsMedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nice Information position performs unexpectedly, ChipsMedia 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 ChipsMedia will offset losses from the drop in ChipsMedia's long position.| Nice Information vs. Samsung Electronics Co | Nice Information vs. Hyundai Motor Co | Nice Information vs. LG Electronics |
| ChipsMedia vs. Jeju Bank | ChipsMedia vs. Spolytech Co | ChipsMedia vs. Hankukpackage Co | ChipsMedia vs. Dgb Financial |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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