Correlation Between Nice and Malam Team

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

By analyzing existing cross correlation between Nice and Malam Team, you can compare the effects of market volatilities on Nice and Malam Team 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 Malam Team. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nice and Malam Team.

Diversification Opportunities for Nice and Malam Team

-0.66

Correlation Coefficient

Nice  Malam Team

Excellent diversification

The 3 months correlation between Nice and Malam is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Nice and Malam Team in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Malam Team 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 Malam Team. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Malam Team has no effect on the direction of Nice i.e., Nice and Malam Team go up and down completely randomly.

Pair Corralation between Nice and Malam Team

Assuming the 90 days trading horizon Nice is expected to under-perform the Malam Team. In addition to that, Nice is 1.51 times more volatile than Malam Team. It trades about -0.18 of its total potential returns per unit of risk. Malam Team is currently generating about 0.14 per unit of volatility. If you would invest  824,300  in Malam Team on December 4, 2024 and sell it today you would earn a total of  117,500  from holding Malam Team or generate 14.25% return on investment over 90 days.

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

Nice  vs.  Malam Team

Nice

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nice has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Malam Team

Risk-Adjusted Performance

Good

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

Pair Trading with Nice and Malam Team

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

The idea behind Nice and Malam Team 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.

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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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.