Correlation Between Nice and Compugen

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

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

Diversification Opportunities for Nice and Compugen

0.29

Correlation Coefficient

Nice  Compugen

Modest diversification

The 3 months correlation between Nice and Compugen is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Nice and Compugen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compugen 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 are associated (or correlated) with Compugen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compugen has no effect on the direction of Nice i.e., Nice and Compugen go up and down completely randomly.

Pair Corralation between Nice and Compugen

Assuming the 90 days trading horizon Nice is expected to under-perform the Compugen. But the stock apears to be less risky and, when comparing its historical volatility, Nice is 1.57 times less risky than Compugen. The stock trades about -0.04 of its potential returns per unit of risk. The Compugen is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  51,540  in Compugen on April 24, 2025 and sell it today you would lose (520.00) from holding Compugen or give up 1.01% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	97.96%
Values	Daily Returns

Nice  vs.  Compugen

Nice

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nice has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Nice is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Compugen

Risk-Adjusted Performance

Very Weak

Over the last 90 days Compugen has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Compugen is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Nice and Compugen

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

The idea behind Nice and Compugen 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.