Correlation Between KTB Investment and NICE Total
Can any of the company-specific risk be diversified away by investing in both KTB Investment and NICE Total 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 KTB Investment and NICE Total into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KTB Investment Securities and NICE Total Cash, you can compare the effects of market volatilities on KTB Investment and NICE Total 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 KTB Investment with a short position of NICE Total. Check out your portfolio center. Please also check ongoing floating volatility patterns of KTB Investment and NICE Total.
Diversification Opportunities for KTB Investment and NICE Total
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between KTB and NICE is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding KTB Investment Securities and NICE Total Cash in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NICE Total Cash and KTB Investment 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 KTB Investment Securities are associated (or correlated) with NICE Total. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NICE Total Cash has no effect on the direction of KTB Investment i.e., KTB Investment and NICE Total go up and down completely randomly.
Pair Corralation between KTB Investment and NICE Total
Assuming the 90 days trading horizon KTB Investment Securities is expected to generate 1.74 times more return on investment than NICE Total. However, KTB Investment is 1.74 times more volatile than NICE Total Cash. It trades about 0.13 of its potential returns per unit of risk. NICE Total Cash is currently generating about 0.2 per unit of risk. If you would invest 298,619 in KTB Investment Securities on December 30, 2024 and sell it today you would earn a total of 48,381 from holding KTB Investment Securities or generate 16.2% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
KTB Investment Securities vs. NICE Total Cash
Performance |
Timeline |
KTB Investment Securities |
NICE Total Cash |
KTB Investment and NICE Total Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with KTB Investment and NICE Total
The main advantage of trading using opposite KTB Investment and NICE Total positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KTB Investment position performs unexpectedly, NICE Total 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 Total will offset losses from the drop in NICE Total's long position.KTB Investment vs. Bookook Steel | KTB Investment vs. Samwon Steel | KTB Investment vs. Young Heung Iron | KTB Investment vs. Hanil Iron Steel |
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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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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