Correlation Between Nice and Socket Mobile

Can any of the company-specific risk be diversified away by investing in both Nice and Socket Mobile 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 Socket Mobile 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 Socket Mobile, you can compare the effects of market volatilities on Nice and Socket Mobile 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 Socket Mobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nice and Socket Mobile.

Diversification Opportunities for Nice and Socket Mobile

-0.45

Correlation Coefficient

Nice  Socket Mobile

Very good diversification

The 3 months correlation between Nice and Socket is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Nice Ltd ADR and Socket Mobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Socket Mobile 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 Socket Mobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Socket Mobile has no effect on the direction of Nice i.e., Nice and Socket Mobile go up and down completely randomly.

Pair Corralation between Nice and Socket Mobile

Given the investment horizon of 90 days Nice is expected to generate 1.06 times less return on investment than Socket Mobile. But when comparing it to its historical volatility, Nice Ltd ADR is 1.42 times less risky than Socket Mobile. It trades about 0.01 of its potential returns per unit of risk. Socket Mobile is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  120.00  in Socket Mobile on May 1, 2025 and sell it today you would lose (7.00) from holding Socket Mobile or give up 5.83% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.65%
Values	Daily Returns

Nice Ltd ADR  vs.  Socket Mobile

Nice Ltd ADR

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Nice Ltd ADR are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating fundamental indicators, Nice may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Socket Mobile

Risk-Adjusted Performance

Very Weak

Over the last 90 days Socket Mobile has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's forward-looking signals remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Nice and Socket Mobile

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

The idea behind Nice Ltd ADR and Socket Mobile 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.

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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.