Correlation Between Affiliated Resources and NICE
Can any of the company-specific risk be diversified away by investing in both Affiliated Resources and NICE 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 Affiliated Resources and NICE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Affiliated Resources Corp and NICE, you can compare the effects of market volatilities on Affiliated Resources and NICE 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 Affiliated Resources with a short position of NICE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Affiliated Resources and NICE.
Diversification Opportunities for Affiliated Resources and NICE
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Affiliated and NICE is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Affiliated Resources Corp and NICE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NICE and Affiliated Resources 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 Affiliated Resources Corp are associated (or correlated) with NICE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NICE has no effect on the direction of Affiliated Resources i.e., Affiliated Resources and NICE go up and down completely randomly.
Pair Corralation between Affiliated Resources and NICE
Given the investment horizon of 90 days Affiliated Resources Corp is expected to under-perform the NICE. In addition to that, Affiliated Resources is 1.61 times more volatile than NICE. It trades about -0.08 of its total potential returns per unit of risk. NICE is currently generating about -0.12 per unit of volatility. If you would invest 18,200 in NICE on August 30, 2024 and sell it today you would lose (1,300) from holding NICE or give up 7.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Affiliated Resources Corp vs. NICE
Performance |
| Timeline |
| Affiliated Resources Corp |
| NICE |
Affiliated Resources and NICE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Affiliated Resources and NICE
The main advantage of trading using opposite Affiliated Resources and NICE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Affiliated Resources position performs unexpectedly, NICE 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 will offset losses from the drop in NICE's long position.| Affiliated Resources vs. Allison Transmission Holdings | Affiliated Resources vs. Luminar Technologies | Affiliated Resources vs. Lear Corporation | Affiliated Resources vs. BorgWarner |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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