Correlation Between Agrometal SAI and NIKE
Can any of the company-specific risk be diversified away by investing in both Agrometal SAI 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 Agrometal SAI and NIKE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Agrometal SAI and NIKE Inc, you can compare the effects of market volatilities on Agrometal SAI 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 Agrometal SAI with a short position of NIKE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agrometal SAI and NIKE.
Diversification Opportunities for Agrometal SAI and NIKE
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Agrometal and NIKE is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Agrometal SAI and NIKE Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NIKE Inc and Agrometal SAI 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 Agrometal SAI 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 Agrometal SAI i.e., Agrometal SAI and NIKE go up and down completely randomly.
Pair Corralation between Agrometal SAI and NIKE
Assuming the 90 days trading horizon Agrometal SAI is expected to under-perform the NIKE. In addition to that, Agrometal SAI is 2.23 times more volatile than NIKE Inc. It trades about -0.29 of its total potential returns per unit of risk. NIKE Inc is currently generating about -0.2 per unit of volatility. If you would invest 742,000 in NIKE Inc on October 23, 2024 and sell it today you would lose (35,000) from holding NIKE Inc or give up 4.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Agrometal SAI vs. NIKE Inc
Performance |
| Timeline |
| Agrometal SAI |
| NIKE Inc |
Agrometal SAI and NIKE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agrometal SAI and NIKE
The main advantage of trading using opposite Agrometal SAI and NIKE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agrometal SAI 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.| Agrometal SAI vs. Harmony Gold Mining | Agrometal SAI vs. Telecom Argentina | Agrometal SAI vs. Compania de Transporte | Agrometal SAI vs. United States Steel |
| NIKE vs. Transportadora de Gas | NIKE vs. Agrometal SAI | NIKE vs. United States Steel | NIKE vs. Compania de Transporte |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |