Correlation Between Nice Information and Konan Technology
Can any of the company-specific risk be diversified away by investing in both Nice Information and Konan 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 Konan 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 Konan Technology, you can compare the effects of market volatilities on Nice Information and Konan 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 Konan Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nice Information and Konan Technology.
Diversification Opportunities for Nice Information and Konan Technology
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Nice and Konan is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Nice Information Telecommunica and Konan Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Konan 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 Konan Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Konan Technology has no effect on the direction of Nice Information i.e., Nice Information and Konan Technology go up and down completely randomly.
Pair Corralation between Nice Information and Konan Technology
Assuming the 90 days trading horizon Nice Information Telecommunication is expected to under-perform the Konan Technology. But the stock apears to be less risky and, when comparing its historical volatility, Nice Information Telecommunication is 8.41 times less risky than Konan Technology. The stock trades about -0.15 of its potential returns per unit of risk. The Konan Technology is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 1,453,000 in Konan Technology on August 29, 2024 and sell it today you would earn a total of 1,077,000 from holding Konan Technology or generate 74.12% 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. Konan Technology
Performance |
| Timeline |
| Nice Information Tel |
| Konan Technology |
Nice Information and Konan Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nice Information and Konan Technology
The main advantage of trading using opposite Nice Information and Konan Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nice Information position performs unexpectedly, Konan 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 Konan Technology will offset losses from the drop in Konan Technology's long position.| Nice Information vs. Daou Data Corp | Nice Information vs. Busan Industrial Co | Nice Information vs. Busan Ind | Nice Information vs. Shinhan WTI Futures |
| Konan Technology vs. Moonbae Steel | Konan Technology vs. LG Electronics Pfd | Konan Technology vs. Sunny Electronics Corp | Konan Technology vs. Hankook Steel Co |
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 Valuation module to check real value of public entities based on technical and fundamental data.
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