Correlation Between Verint Systems and Nice
Can any of the company-specific risk be diversified away by investing in both Verint Systems and Nice 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 Verint Systems and Nice into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Verint Systems and Nice Ltd ADR, you can compare the effects of market volatilities on Verint Systems and Nice 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 Verint Systems with a short position of Nice. Check out your portfolio center. Please also check ongoing floating volatility patterns of Verint Systems and Nice.
Diversification Opportunities for Verint Systems and Nice
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Verint and Nice is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Verint Systems and Nice Ltd ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nice Ltd ADR and Verint Systems 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 Verint Systems are associated (or correlated) with Nice. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nice Ltd ADR has no effect on the direction of Verint Systems i.e., Verint Systems and Nice go up and down completely randomly.
Pair Corralation between Verint Systems and Nice
Given the investment horizon of 90 days Verint Systems is expected to generate 1.8 times less return on investment than Nice. In addition to that, Verint Systems is 1.25 times more volatile than Nice Ltd ADR. It trades about 0.03 of its total potential returns per unit of risk. Nice Ltd ADR is currently generating about 0.07 per unit of volatility. If you would invest 21,400 in Nice Ltd ADR on January 26, 2024 and sell it today you would earn a total of 1,671 from holding Nice Ltd ADR or generate 7.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Verint Systems vs. Nice Ltd ADR
Performance |
| Timeline |
| Verint Systems |
| Nice Ltd ADR |
Verint Systems and Nice Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Verint Systems and Nice
The main advantage of trading using opposite Verint Systems and Nice positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Verint Systems position performs unexpectedly, Nice 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 will offset losses from the drop in Nice's long position.| Verint Systems vs. SentinelOne | Verint Systems vs. MongoDB | Verint Systems vs. AvidXchange Holdings | Verint Systems vs. Informatica |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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