Correlation Between Creative Media and Nice
Can any of the company-specific risk be diversified away by investing in both Creative Media 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 Creative Media and Nice into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Creative Media Community and Nice, you can compare the effects of market volatilities on Creative Media 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 Creative Media with a short position of Nice. Check out your portfolio center. Please also check ongoing floating volatility patterns of Creative Media and Nice.
Diversification Opportunities for Creative Media and Nice
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Creative and Nice is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Creative Media Community and Nice in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nice and Creative Media 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 Creative Media Community 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 Creative Media i.e., Creative Media and Nice go up and down completely randomly.
Pair Corralation between Creative Media and Nice
Assuming the 90 days trading horizon Creative Media Community is expected to under-perform the Nice. In addition to that, Creative Media is 1.4 times more volatile than Nice. It trades about -0.61 of its total potential returns per unit of risk. Nice is currently generating about 0.01 per unit of volatility. If you would invest 6,601,000 in Nice on September 1, 2024 and sell it today you would lose (65,000) from holding Nice or give up 0.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Creative Media Community vs. Nice
Performance |
| Timeline |
| Creative Media Community |
| Nice |
Creative Media and Nice Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Creative Media and Nice
The main advantage of trading using opposite Creative Media and Nice positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Creative Media 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.| Creative Media vs. Nice | Creative Media vs. The Gold Bond | Creative Media vs. Bank Leumi Le Israel | Creative Media vs. ICL Israel Chemicals |
| Nice vs. Elbit Systems | Nice vs. Tower Semiconductor | Nice vs. Bank Leumi Le Israel | Nice vs. Teva Pharmaceutical Industries |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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