Correlation Between Nice and Mentor Graphics
Can any of the company-specific risk be diversified away by investing in both Nice and Mentor Graphics 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 Mentor Graphics 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 Mentor Graphics Corp, you can compare the effects of market volatilities on Nice and Mentor Graphics 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 Mentor Graphics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nice and Mentor Graphics.
Diversification Opportunities for Nice and Mentor Graphics
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Nice and Mentor is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Nice Ltd ADR and Mentor Graphics Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mentor Graphics Corp 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 Mentor Graphics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mentor Graphics Corp has no effect on the direction of Nice i.e., Nice and Mentor Graphics go up and down completely randomly.
Pair Corralation between Nice and Mentor Graphics
If you would invest 24,889 in Nice Ltd ADR on December 29, 2023 and sell it today you would earn a total of 670.00 from holding Nice Ltd ADR or generate 2.69% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 0.0% |
Values | Daily Returns |
Nice Ltd ADR vs. Mentor Graphics Corp
Performance |
Timeline |
Nice Ltd ADR |
Mentor Graphics Corp |
Risk-Adjusted Performance
0 of 100
Low | High |
Very Weak
Nice and Mentor Graphics Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Nice and Mentor Graphics
The main advantage of trading using opposite Nice and Mentor Graphics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nice position performs unexpectedly, Mentor Graphics 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 Mentor Graphics will offset losses from the drop in Mentor Graphics' long position.Nice vs. Kingsoft Cloud HoldingsLtd | Nice vs. C3 Ai Inc | Nice vs. Eventbrite Class A | Nice vs. Daily Journal Corp |
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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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