Correlation Between InfoBank and NICE Information
Can any of the company-specific risk be diversified away by investing in both InfoBank and NICE Information 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 InfoBank and NICE Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between InfoBank and NICE Information Service, you can compare the effects of market volatilities on InfoBank and NICE Information 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 InfoBank with a short position of NICE Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of InfoBank and NICE Information.
Diversification Opportunities for InfoBank and NICE Information
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between InfoBank and NICE is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding InfoBank and NICE Information Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NICE Information Service and InfoBank 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 InfoBank are associated (or correlated) with NICE Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NICE Information Service has no effect on the direction of InfoBank i.e., InfoBank and NICE Information go up and down completely randomly.
Pair Corralation between InfoBank and NICE Information
Assuming the 90 days trading horizon InfoBank is expected to generate 3.32 times more return on investment than NICE Information. However, InfoBank is 3.32 times more volatile than NICE Information Service. It trades about 0.07 of its potential returns per unit of risk. NICE Information Service is currently generating about 0.16 per unit of risk. If you would invest 736,000 in InfoBank on September 24, 2024 and sell it today you would earn a total of 38,000 from holding InfoBank or generate 5.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
InfoBank vs. NICE Information Service
Performance |
| Timeline |
| InfoBank |
| NICE Information Service |
InfoBank and NICE Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with InfoBank and NICE Information
The main advantage of trading using opposite InfoBank and NICE Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InfoBank position performs unexpectedly, NICE Information 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 NICE Information will offset losses from the drop in NICE Information's long position.| InfoBank vs. Dongsin Engineering Construction | InfoBank vs. Doosan Fuel Cell | InfoBank vs. Daishin Balance 1 | InfoBank vs. Total Soft Bank |
| NICE Information vs. InfoBank | NICE Information vs. Samyang Foods Co | NICE Information vs. Lotte Chilsung Beverage | NICE Information vs. Samlip General Foods |
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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