Correlation Between Bread Financial and NIKE
Can any of the company-specific risk be diversified away by investing in both Bread Financial 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 Bread Financial and NIKE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bread Financial Holdings and NIKE Inc, you can compare the effects of market volatilities on Bread Financial 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 Bread Financial with a short position of NIKE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bread Financial and NIKE.
Diversification Opportunities for Bread Financial and NIKE
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Bread and NIKE is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Bread Financial Holdings and NIKE Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NIKE Inc and Bread Financial 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 Bread Financial Holdings 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 Bread Financial i.e., Bread Financial and NIKE go up and down completely randomly.
Pair Corralation between Bread Financial and NIKE
Assuming the 90 days trading horizon Bread Financial Holdings is expected to generate 1.6 times more return on investment than NIKE. However, Bread Financial is 1.6 times more volatile than NIKE Inc. It trades about 0.06 of its potential returns per unit of risk. NIKE Inc is currently generating about -0.01 per unit of risk. If you would invest 4,796 in Bread Financial Holdings on September 19, 2024 and sell it today you would earn a total of 5,094 from holding Bread Financial Holdings or generate 106.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 96.4% |
| Values | Daily Returns |
Bread Financial Holdings vs. NIKE Inc
Performance |
| Timeline |
| Bread Financial Holdings |
| NIKE Inc |
Bread Financial and NIKE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bread Financial and NIKE
The main advantage of trading using opposite Bread Financial and NIKE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bread Financial 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.| Bread Financial vs. Take Two Interactive Software | Bread Financial vs. Unity Software | Bread Financial vs. G2D Investments | Bread Financial vs. Micron Technology |
| NIKE vs. Livetech da Bahia | NIKE vs. Unity Software | NIKE vs. Bread Financial Holdings | NIKE vs. Sumitomo Mitsui Financial |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |