Correlation Between Nable Communications and Stic Investments
Can any of the company-specific risk be diversified away by investing in both Nable Communications and Stic Investments 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 Nable Communications and Stic Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nable Communications and Stic Investments, you can compare the effects of market volatilities on Nable Communications and Stic Investments 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 Nable Communications with a short position of Stic Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nable Communications and Stic Investments.
Diversification Opportunities for Nable Communications and Stic Investments
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nable and Stic is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Nable Communications and Stic Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stic Investments and Nable Communications 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 Nable Communications are associated (or correlated) with Stic Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stic Investments has no effect on the direction of Nable Communications i.e., Nable Communications and Stic Investments go up and down completely randomly.
Pair Corralation between Nable Communications and Stic Investments
Assuming the 90 days trading horizon Nable Communications is expected to under-perform the Stic Investments. But the stock apears to be less risky and, when comparing its historical volatility, Nable Communications is 1.35 times less risky than Stic Investments. The stock trades about -0.01 of its potential returns per unit of risk. The Stic Investments is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 545,624 in Stic Investments on September 3, 2024 and sell it today you would earn a total of 282,376 from holding Stic Investments or generate 51.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nable Communications vs. Stic Investments
Performance |
| Timeline |
| Nable Communications |
| Stic Investments |
Nable Communications and Stic Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nable Communications and Stic Investments
The main advantage of trading using opposite Nable Communications and Stic Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nable Communications position performs unexpectedly, Stic Investments 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 Stic Investments will offset losses from the drop in Stic Investments' long position.| Nable Communications vs. Hwangkum Steel Technology | Nable Communications vs. RFTech Co | Nable Communications vs. Sangsin Energy Display | Nable Communications vs. Konan Technology |
| Stic Investments vs. Asiana Airlines | Stic Investments vs. Daishin Information Communications | Stic Investments vs. Ssangyong Information Communication | Stic Investments vs. Nable Communications |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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