Correlation Between Nice Information and Formetal
Can any of the company-specific risk be diversified away by investing in both Nice Information and Formetal 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 Formetal 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 Formetal Co, you can compare the effects of market volatilities on Nice Information and Formetal 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 Formetal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nice Information and Formetal.
Diversification Opportunities for Nice Information and Formetal
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Nice and Formetal is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Nice Information Telecommunica and Formetal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Formetal 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 Formetal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Formetal has no effect on the direction of Nice Information i.e., Nice Information and Formetal go up and down completely randomly.
Pair Corralation between Nice Information and Formetal
Assuming the 90 days trading horizon Nice Information Telecommunication is expected to under-perform the Formetal. But the stock apears to be less risky and, when comparing its historical volatility, Nice Information Telecommunication is 5.05 times less risky than Formetal. The stock trades about -0.14 of its potential returns per unit of risk. The Formetal Co is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 300,000 in Formetal Co on October 30, 2024 and sell it today you would earn a total of 80,500 from holding Formetal Co or generate 26.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nice Information Telecommunica vs. Formetal Co
Performance |
| Timeline |
| Nice Information Tel |
| Formetal |
Nice Information and Formetal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nice Information and Formetal
The main advantage of trading using opposite Nice Information and Formetal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nice Information position performs unexpectedly, Formetal 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 Formetal will offset losses from the drop in Formetal'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 |
| Formetal vs. Shinhan Financial Group | Formetal vs. Golden Bridge Investment | Formetal vs. Jeju Bank | Formetal vs. DB Financial Investment |
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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