Correlation Between GODM Investments and Nice
Can any of the company-specific risk be diversified away by investing in both GODM Investments 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 GODM Investments and Nice into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GODM Investments and Nice, you can compare the effects of market volatilities on GODM Investments 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 GODM Investments with a short position of Nice. Check out your portfolio center. Please also check ongoing floating volatility patterns of GODM Investments and Nice.
Diversification Opportunities for GODM Investments and Nice
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GODM and Nice is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding GODM Investments and Nice in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nice and GODM Investments 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 GODM Investments 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 has no effect on the direction of GODM Investments i.e., GODM Investments and Nice go up and down completely randomly.
Pair Corralation between GODM Investments and Nice
Assuming the 90 days trading horizon GODM Investments is expected to under-perform the Nice. In addition to that, GODM Investments is 2.53 times more volatile than Nice. It trades about -0.31 of its total potential returns per unit of risk. Nice is currently generating about -0.39 per unit of volatility. If you would invest 9,771,000 in Nice on January 24, 2024 and sell it today you would lose (959,000) from holding Nice or give up 9.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GODM Investments vs. Nice
Performance |
| Timeline |
| GODM Investments |
| Nice |
GODM Investments and Nice Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GODM Investments and Nice
The main advantage of trading using opposite GODM Investments and Nice positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GODM Investments 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.| GODM Investments vs. Retailors | GODM Investments vs. Dan Hotels | GODM Investments vs. Petrochemical | GODM Investments vs. Global Knafaim Leasing |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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