Correlation Between Finetechnix CoLtd and Nice Information
Can any of the company-specific risk be diversified away by investing in both Finetechnix CoLtd 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 Finetechnix CoLtd and Nice Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Finetechnix CoLtd and Nice Information Telecommunication, you can compare the effects of market volatilities on Finetechnix CoLtd 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 Finetechnix CoLtd with a short position of Nice Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Finetechnix CoLtd and Nice Information.
Diversification Opportunities for Finetechnix CoLtd and Nice Information
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Finetechnix and Nice is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Finetechnix CoLtd and Nice Information Telecommunica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nice Information Tel and Finetechnix CoLtd 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 Finetechnix CoLtd 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 Tel has no effect on the direction of Finetechnix CoLtd i.e., Finetechnix CoLtd and Nice Information go up and down completely randomly.
Pair Corralation between Finetechnix CoLtd and Nice Information
Assuming the 90 days trading horizon Finetechnix CoLtd is expected to under-perform the Nice Information. In addition to that, Finetechnix CoLtd is 3.75 times more volatile than Nice Information Telecommunication. It trades about -0.09 of its total potential returns per unit of risk. Nice Information Telecommunication is currently generating about 0.04 per unit of volatility. If you would invest 1,729,000 in Nice Information Telecommunication on November 28, 2024 and sell it today you would earn a total of 13,000 from holding Nice Information Telecommunication or generate 0.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Finetechnix CoLtd vs. Nice Information Telecommunica
Performance |
| Timeline |
| Finetechnix CoLtd |
| Nice Information Tel |
Finetechnix CoLtd and Nice Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Finetechnix CoLtd and Nice Information
The main advantage of trading using opposite Finetechnix CoLtd and Nice Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Finetechnix CoLtd 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.| Finetechnix CoLtd vs. Samwha Electronics Co | Finetechnix CoLtd vs. Ecoplastic | Finetechnix CoLtd vs. Iljin Materials Co | Finetechnix CoLtd vs. Hana Materials |
| Nice Information vs. Soulbrain Holdings Co | Nice Information vs. NICE Total Cash | Nice Information vs. Geumhwa Plant Service | Nice Information vs. AfreecaTV 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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