Correlation Between TRI CHEMICAL and Nike
Can any of the company-specific risk be diversified away by investing in both TRI CHEMICAL and Nike 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 TRI CHEMICAL and Nike into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TRI CHEMICAL LABORATINC and Nike Inc, you can compare the effects of market volatilities on TRI CHEMICAL and Nike 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 TRI CHEMICAL with a short position of Nike. Check out your portfolio center. Please also check ongoing floating volatility patterns of TRI CHEMICAL and Nike.
Diversification Opportunities for TRI CHEMICAL and Nike
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between TRI and Nike is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding TRI CHEMICAL LABORATINC and Nike Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nike Inc and TRI CHEMICAL 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 TRI CHEMICAL LABORATINC are associated (or correlated) with Nike. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nike Inc has no effect on the direction of TRI CHEMICAL i.e., TRI CHEMICAL and Nike go up and down completely randomly.
Pair Corralation between TRI CHEMICAL and Nike
Assuming the 90 days horizon TRI CHEMICAL LABORATINC is expected to generate 2.58 times more return on investment than Nike. However, TRI CHEMICAL is 2.58 times more volatile than Nike Inc. It trades about 0.24 of its potential returns per unit of risk. Nike Inc is currently generating about -0.02 per unit of risk. If you would invest 1,730 in TRI CHEMICAL LABORATINC on October 30, 2024 and sell it today you would earn a total of 290.00 from holding TRI CHEMICAL LABORATINC or generate 16.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
TRI CHEMICAL LABORATINC vs. Nike Inc
Performance |
| Timeline |
| TRI CHEMICAL LABORATINC |
| Nike Inc |
TRI CHEMICAL and Nike Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TRI CHEMICAL and Nike
The main advantage of trading using opposite TRI CHEMICAL and Nike positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TRI CHEMICAL position performs unexpectedly, Nike 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 Nike will offset losses from the drop in Nike's long position.| TRI CHEMICAL vs. ANTA SPORTS PRODUCT | TRI CHEMICAL vs. Columbia Sportswear | TRI CHEMICAL vs. Peijia Medical Limited | TRI CHEMICAL vs. Transport International Holdings |
| Nike vs. Grand Canyon Education | Nike vs. ALERION CLEANPOWER | Nike vs. American Public Education | Nike vs. STRAYER EDUCATION |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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