Correlation Between InnoTherapy and NICE Information
Can any of the company-specific risk be diversified away by investing in both InnoTherapy 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 InnoTherapy and NICE Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between InnoTherapy and NICE Information Service, you can compare the effects of market volatilities on InnoTherapy 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 InnoTherapy with a short position of NICE Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of InnoTherapy and NICE Information.
Diversification Opportunities for InnoTherapy and NICE Information
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between InnoTherapy and NICE is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding InnoTherapy 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 InnoTherapy 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 InnoTherapy 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 InnoTherapy i.e., InnoTherapy and NICE Information go up and down completely randomly.
Pair Corralation between InnoTherapy and NICE Information
Assuming the 90 days trading horizon InnoTherapy is expected to generate 1.37 times less return on investment than NICE Information. But when comparing it to its historical volatility, InnoTherapy is 1.07 times less risky than NICE Information. It trades about 0.09 of its potential returns per unit of risk. NICE Information Service is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,144,000 in NICE Information Service on September 2, 2024 and sell it today you would earn a total of 62,000 from holding NICE Information Service or generate 5.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
InnoTherapy vs. NICE Information Service
Performance |
| Timeline |
| InnoTherapy |
| NICE Information Service |
InnoTherapy and NICE Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with InnoTherapy and NICE Information
The main advantage of trading using opposite InnoTherapy and NICE Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InnoTherapy 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.| InnoTherapy vs. Nable Communications | InnoTherapy vs. Korea Computer | InnoTherapy vs. Jinro Distillers Co | InnoTherapy vs. Homecast CoLtd |
| NICE Information vs. AptaBio Therapeutics | NICE Information vs. Daewoo SBI SPAC | NICE Information vs. Dream Security co | NICE Information vs. Microfriend |
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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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