Correlation Between INNOX Advanced and Nice Information
Can any of the company-specific risk be diversified away by investing in both INNOX Advanced 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 INNOX Advanced and Nice Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INNOX Advanced Materials and Nice Information Telecommunication, you can compare the effects of market volatilities on INNOX Advanced 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 INNOX Advanced with a short position of Nice Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of INNOX Advanced and Nice Information.
Diversification Opportunities for INNOX Advanced and Nice Information
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between INNOX and Nice is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding INNOX Advanced Materials 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 INNOX Advanced 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 INNOX Advanced Materials 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 INNOX Advanced i.e., INNOX Advanced and Nice Information go up and down completely randomly.
Pair Corralation between INNOX Advanced and Nice Information
Assuming the 90 days trading horizon INNOX Advanced Materials is expected to under-perform the Nice Information. In addition to that, INNOX Advanced is 3.67 times more volatile than Nice Information Telecommunication. It trades about -0.18 of its total potential returns per unit of risk. Nice Information Telecommunication is currently generating about -0.13 per unit of volatility. If you would invest 1,868,000 in Nice Information Telecommunication on August 30, 2024 and sell it today you would lose (35,000) from holding Nice Information Telecommunication or give up 1.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
INNOX Advanced Materials vs. Nice Information Telecommunica
Performance |
| Timeline |
| INNOX Advanced Materials |
| Nice Information Tel |
INNOX Advanced and Nice Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INNOX Advanced and Nice Information
The main advantage of trading using opposite INNOX Advanced and Nice Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INNOX Advanced 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.| INNOX Advanced vs. SK Hynix | INNOX Advanced vs. LX Semicon Co | INNOX Advanced vs. People Technology | INNOX Advanced vs. SIMMTECH Co |
| Nice Information vs. Daou Data Corp | Nice Information vs. Busan Industrial Co | Nice Information vs. Busan Ind | Nice Information vs. Shinhan WTI Futures |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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