Correlation Between Nice and WhiteSmoke Software
Can any of the company-specific risk be diversified away by investing in both Nice and WhiteSmoke Software 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 WhiteSmoke Software into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nice and WhiteSmoke Software, you can compare the effects of market volatilities on Nice and WhiteSmoke Software 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 WhiteSmoke Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nice and WhiteSmoke Software.
Diversification Opportunities for Nice and WhiteSmoke Software
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Nice and WhiteSmoke is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Nice and WhiteSmoke Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WhiteSmoke Software 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 WhiteSmoke Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WhiteSmoke Software has no effect on the direction of Nice i.e., Nice and WhiteSmoke Software go up and down completely randomly.
Pair Corralation between Nice and WhiteSmoke Software
Assuming the 90 days trading horizon Nice is expected to generate 0.73 times more return on investment than WhiteSmoke Software. However, Nice is 1.36 times less risky than WhiteSmoke Software. It trades about 0.01 of its potential returns per unit of risk. WhiteSmoke Software is currently generating about -0.07 per unit of risk. If you would invest 6,700,000 in Nice on August 29, 2024 and sell it today you would lose (80,000) from holding Nice or give up 1.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nice vs. WhiteSmoke Software
Performance |
| Timeline |
| Nice |
| WhiteSmoke Software |
Nice and WhiteSmoke Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nice and WhiteSmoke Software
The main advantage of trading using opposite Nice and WhiteSmoke Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nice position performs unexpectedly, WhiteSmoke Software 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 WhiteSmoke Software will offset losses from the drop in WhiteSmoke Software's long position.| Nice vs. Elbit Systems | Nice vs. Tower Semiconductor | Nice vs. Bank Leumi Le Israel | Nice vs. Teva Pharmaceutical Industries |
| WhiteSmoke Software vs. Iargento Hi Tech | WhiteSmoke Software vs. Retailors | WhiteSmoke Software vs. Tower Semiconductor | WhiteSmoke Software vs. Global Knafaim Leasing |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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