Correlation Between Nice and Matrix
Can any of the company-specific risk be diversified away by investing in both Nice and Matrix 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 Nice and Matrix into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nice and Matrix, you can compare the effects of market volatilities on Nice and Matrix 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 Nice with a short position of Matrix. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nice and Matrix.
Diversification Opportunities for Nice and Matrix
Modest diversification
The 3 months correlation between Nice and Matrix is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Nice and Matrix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Matrix and Nice 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 Nice are associated (or correlated) with Matrix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Matrix has no effect on the direction of Nice i.e., Nice and Matrix go up and down completely randomly.
Pair Corralation between Nice and Matrix
Assuming the 90 days trading horizon Nice is expected to generate 31.42 times less return on investment than Matrix. In addition to that, Nice is 2.21 times more volatile than Matrix. It trades about 0.01 of its total potential returns per unit of risk. Matrix is currently generating about 0.39 per unit of volatility. If you would invest 722,900 in Matrix on August 29, 2024 and sell it today you would earn a total of 103,900 from holding Matrix or generate 14.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nice vs. Matrix
Performance |
| Timeline |
| Nice |
| Matrix |
Nice and Matrix Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nice and Matrix
The main advantage of trading using opposite Nice and Matrix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nice position performs unexpectedly, Matrix 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 Matrix will offset losses from the drop in Matrix's long position.| Nice vs. Elbit Systems | Nice vs. Tower Semiconductor | Nice vs. Bank Leumi Le Israel | Nice vs. Teva Pharmaceutical Industries |
| Matrix vs. Automatic Bank Services | Matrix vs. EN Shoham Business | Matrix vs. Rapac Communication Infrastructure | Matrix vs. Tadiran Hldg |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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