Correlation Between Nice Information and Jeju Beer
Can any of the company-specific risk be diversified away by investing in both Nice Information and Jeju Beer 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 Jeju Beer 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 Jeju Beer Co, you can compare the effects of market volatilities on Nice Information and Jeju Beer 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 Jeju Beer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nice Information and Jeju Beer.
Diversification Opportunities for Nice Information and Jeju Beer
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nice and Jeju is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Nice Information Telecommunica and Jeju Beer Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jeju Beer 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 Jeju Beer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jeju Beer has no effect on the direction of Nice Information i.e., Nice Information and Jeju Beer go up and down completely randomly.
Pair Corralation between Nice Information and Jeju Beer
Assuming the 90 days trading horizon Nice Information Telecommunication is expected to generate 0.43 times more return on investment than Jeju Beer. However, Nice Information Telecommunication is 2.33 times less risky than Jeju Beer. It trades about -0.19 of its potential returns per unit of risk. Jeju Beer Co is currently generating about -0.35 per unit of risk. If you would invest 1,785,000 in Nice Information Telecommunication on November 3, 2024 and sell it today you would lose (56,000) from holding Nice Information Telecommunication or give up 3.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nice Information Telecommunica vs. Jeju Beer Co
Performance |
| Timeline |
| Nice Information Tel |
| Jeju Beer |
Nice Information and Jeju Beer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nice Information and Jeju Beer
The main advantage of trading using opposite Nice Information and Jeju Beer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nice Information position performs unexpectedly, Jeju Beer 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 Jeju Beer will offset losses from the drop in Jeju Beer'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 |
| Jeju Beer vs. Nh Investment And | Jeju Beer vs. Innowireless Co | Jeju Beer vs. FOODWELL Co | Jeju Beer vs. Foodnamoo |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |