Correlation Between INSUN Environmental and NICE Information
Can any of the company-specific risk be diversified away by investing in both INSUN Environmental 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 INSUN Environmental and NICE Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INSUN Environmental New and NICE Information Service, you can compare the effects of market volatilities on INSUN Environmental 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 INSUN Environmental with a short position of NICE Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of INSUN Environmental and NICE Information.
Diversification Opportunities for INSUN Environmental and NICE Information
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between INSUN and NICE is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding INSUN Environmental New 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 INSUN Environmental 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 INSUN Environmental New 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 INSUN Environmental i.e., INSUN Environmental and NICE Information go up and down completely randomly.
Pair Corralation between INSUN Environmental and NICE Information
Assuming the 90 days trading horizon INSUN Environmental New is expected to under-perform the NICE Information. But the stock apears to be less risky and, when comparing its historical volatility, INSUN Environmental New is 1.22 times less risky than NICE Information. The stock trades about -0.04 of its potential returns per unit of risk. The NICE Information Service is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 1,208,299 in NICE Information Service on October 15, 2024 and sell it today you would lose (58,299) from holding NICE Information Service or give up 4.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
INSUN Environmental New vs. NICE Information Service
Performance |
| Timeline |
| INSUN Environmental New |
| NICE Information Service |
INSUN Environmental and NICE Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INSUN Environmental and NICE Information
The main advantage of trading using opposite INSUN Environmental and NICE Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INSUN Environmental 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.| INSUN Environmental vs. Korea Environment Technology | INSUN Environmental vs. Paradise Co | INSUN Environmental vs. Seoul Semiconductor Co | INSUN Environmental vs. JUSUNG ENGINEERING Co |
| NICE Information vs. Woori Financial Group | NICE Information vs. Jb Financial | NICE Information vs. Nh Investment And | NICE Information vs. Hyundai Heavy Industries |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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