Correlation Between Korea Computer and NICE Information
Can any of the company-specific risk be diversified away by investing in both Korea Computer 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 Korea Computer and NICE Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korea Computer and NICE Information Service, you can compare the effects of market volatilities on Korea Computer 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 Korea Computer with a short position of NICE Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Computer and NICE Information.
Diversification Opportunities for Korea Computer and NICE Information
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Korea and NICE is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Korea Computer 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 Korea Computer 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 Korea Computer 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 Korea Computer i.e., Korea Computer and NICE Information go up and down completely randomly.
Pair Corralation between Korea Computer and NICE Information
Assuming the 90 days trading horizon Korea Computer is expected to generate 1.33 times less return on investment than NICE Information. In addition to that, Korea Computer is 1.48 times more volatile than NICE Information Service. It trades about 0.07 of its total potential returns per unit of risk. NICE Information Service is currently generating about 0.13 per unit of volatility. If you would invest 1,113,000 in NICE Information Service on August 29, 2024 and sell it today you would earn a total of 73,000 from holding NICE Information Service or generate 6.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea Computer vs. NICE Information Service
Performance |
| Timeline |
| Korea Computer |
| NICE Information Service |
Korea Computer and NICE Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Computer and NICE Information
The main advantage of trading using opposite Korea Computer and NICE Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Computer 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.| Korea Computer vs. Daou Data Corp | Korea Computer vs. Busan Industrial Co | Korea Computer vs. Busan Ind | Korea Computer vs. Shinhan WTI Futures |
| NICE Information vs. Puloon Technology | NICE Information vs. Woori Technology | NICE Information vs. LG Household Healthcare | NICE Information vs. Aprogen Healthcare Games |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |