Correlation Between Nice and One Software

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

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

Diversification Opportunities for Nice and One Software

0.04

Correlation Coefficient

Nice  One Software

Significant diversification

The 3 months correlation between Nice and One is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Nice and One Software Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on One Software Technologies 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 One Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of One Software Technologies has no effect on the direction of Nice i.e., Nice and One Software go up and down completely randomly.

Pair Corralation between Nice and One Software

Assuming the 90 days trading horizon Nice is expected to generate 1.58 times more return on investment than One Software. However, Nice is 1.58 times more volatile than One Software Technologies. It trades about -0.21 of its potential returns per unit of risk. One Software Technologies is currently generating about -0.45 per unit of risk. If you would invest  6,369,000  in Nice on October 21, 2024 and sell it today you would lose (349,000) from holding Nice or give up 5.48% of portfolio value over 90 days.

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

Nice  vs.  One Software Technologies

Nice

Risk-Adjusted Performance

0 of 100

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 February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

One Software Technologies

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in One Software Technologies are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical and fundamental indicators, One Software sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Nice and One Software

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

The idea behind Nice and One Software Technologies 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.