Correlation Between Nice and PCB Tec
Can any of the company-specific risk be diversified away by investing in both Nice and PCB Tec 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 PCB Tec into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nice and PCB Tec, you can compare the effects of market volatilities on Nice and PCB Tec 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 PCB Tec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nice and PCB Tec.
Diversification Opportunities for Nice and PCB Tec
Significant diversification
The 3 months correlation between Nice and PCB is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Nice and PCB Tec in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PCB Tec 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 PCB Tec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PCB Tec has no effect on the direction of Nice i.e., Nice and PCB Tec go up and down completely randomly.
Pair Corralation between Nice and PCB Tec
Assuming the 90 days trading horizon Nice is expected to under-perform the PCB Tec. But the stock apears to be less risky and, when comparing its historical volatility, Nice is 1.03 times less risky than PCB Tec. The stock trades about -0.05 of its potential returns per unit of risk. The PCB Tec is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 69,120 in PCB Tec on August 24, 2024 and sell it today you would earn a total of 140.00 from holding PCB Tec or generate 0.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nice vs. PCB Tec
Performance |
| Timeline |
| Nice |
| PCB Tec |
Nice and PCB Tec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nice and PCB Tec
The main advantage of trading using opposite Nice and PCB Tec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nice position performs unexpectedly, PCB Tec 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 PCB Tec will offset losses from the drop in PCB Tec's long position.| Nice vs. Elbit Systems | Nice vs. Tower Semiconductor | Nice vs. Bank Leumi Le Israel | Nice vs. Teva Pharmaceutical Industries |
| PCB Tec vs. Automatic Bank Services | PCB Tec vs. EN Shoham Business | PCB Tec vs. Rapac Communication Infrastructure | PCB Tec 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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