Correlation Between Nice and Camtek

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

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

Diversification Opportunities for Nice and Camtek

-0.22

Correlation Coefficient

Nice  Camtek

Very good diversification

The 3 months correlation between Nice and Camtek is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Nice Ltd ADR and Camtek in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Camtek 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 Ltd ADR are associated (or correlated) with Camtek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Camtek has no effect on the direction of Nice i.e., Nice and Camtek go up and down completely randomly.

Pair Corralation between Nice and Camtek

Given the investment horizon of 90 days Nice Ltd ADR is expected to generate 0.57 times more return on investment than Camtek. However, Nice Ltd ADR is 1.75 times less risky than Camtek. It trades about 0.02 of its potential returns per unit of risk. Camtek is currently generating about -0.07 per unit of risk. If you would invest  16,860  in Nice Ltd ADR on September 29, 2024 and sell it today you would earn a total of  485.00  from holding Nice Ltd ADR or generate 2.88% return on investment over 90 days.

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

Nice Ltd ADR  vs.  Camtek

Nice Ltd ADR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nice Ltd ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, Nice is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Camtek

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Camtek are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating primary indicators, Camtek may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Nice and Camtek

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

The idea behind Nice Ltd ADR and Camtek 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.