Correlation Between NICE Total and Nice Information

Can any of the company-specific risk be diversified away by investing in both NICE Total and Nice Information 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 Total and Nice Information into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between NICE Total Cash and Nice Information Telecommunication, you can compare the effects of market volatilities on NICE Total and Nice Information 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 Total with a short position of Nice Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of NICE Total and Nice Information.

Diversification Opportunities for NICE Total and Nice Information

-0.56

Correlation Coefficient

NICE Total  Nice Information

Excellent diversification

The 3 months correlation between NICE and Nice is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding NICE Total Cash and Nice Information Telecommunica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nice Information Tel and NICE Total 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 Total Cash are associated (or correlated) with Nice Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nice Information Tel has no effect on the direction of NICE Total i.e., NICE Total and Nice Information go up and down completely randomly.

Pair Corralation between NICE Total and Nice Information

Assuming the 90 days trading horizon NICE Total Cash is expected to generate 1.06 times more return on investment than Nice Information. However, NICE Total is 1.06 times more volatile than Nice Information Telecommunication. It trades about 0.14 of its potential returns per unit of risk. Nice Information Telecommunication is currently generating about -0.07 per unit of risk. If you would invest  466,381  in NICE Total Cash on November 29, 2024 and sell it today you would earn a total of  53,619  from holding NICE Total Cash or generate 11.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

NICE Total Cash  vs.  Nice Information Telecommunica

NICE Total Cash

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in NICE Total Cash are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, NICE Total sustained solid returns over the last few months and may actually be approaching a breakup point.

Nice Information Tel

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nice Information Telecommunication has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Nice Information is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with NICE Total and Nice Information

The main advantage of trading using opposite NICE Total and Nice Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NICE Total position performs unexpectedly, Nice Information 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 Information will offset losses from the drop in Nice Information's long position.

The idea behind NICE Total Cash and Nice Information Telecommunication pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.