Correlation Between Nice and Ebix
Can any of the company-specific risk be diversified away by investing in both Nice and Ebix 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 Ebix 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 Ebix Inc, you can compare the effects of market volatilities on Nice and Ebix 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 Ebix. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nice and Ebix.
Diversification Opportunities for Nice and Ebix
Excellent diversification
The 3 months correlation between Nice and Ebix is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Nice Ltd ADR and Ebix Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ebix Inc 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 Ebix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ebix Inc has no effect on the direction of Nice i.e., Nice and Ebix go up and down completely randomly.
Pair Corralation between Nice and Ebix
Given the investment horizon of 90 days Nice Ltd ADR is expected to generate 0.16 times more return on investment than Ebix. However, Nice Ltd ADR is 6.35 times less risky than Ebix. It trades about 0.04 of its potential returns per unit of risk. Ebix Inc is currently generating about -0.03 per unit of risk. If you would invest 19,899 in Nice Ltd ADR on January 20, 2024 and sell it today you would earn a total of 3,196 from holding Nice Ltd ADR or generate 16.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 85.94% |
| Values | Daily Returns |
Nice Ltd ADR vs. Ebix Inc
Performance |
| Timeline |
| Nice Ltd ADR |
| Ebix Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Nice and Ebix Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nice and Ebix
The main advantage of trading using opposite Nice and Ebix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nice position performs unexpectedly, Ebix 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 Ebix will offset losses from the drop in Ebix's long position.The idea behind Nice Ltd ADR and Ebix Inc 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.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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |