Correlation Between Amer Sports, and Nike
Can any of the company-specific risk be diversified away by investing in both Amer Sports, 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 Amer Sports, and Nike into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amer Sports, and Nike Inc, you can compare the effects of market volatilities on Amer Sports, 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 Amer Sports, with a short position of Nike. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amer Sports, and Nike.
Diversification Opportunities for Amer Sports, and Nike
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Amer and Nike is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Amer Sports, and Nike Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nike Inc and Amer Sports, 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 Amer Sports, 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 Amer Sports, i.e., Amer Sports, and Nike go up and down completely randomly.
Pair Corralation between Amer Sports, and Nike
Allowing for the 90-day total investment horizon Amer Sports, is expected to generate 2.16 times more return on investment than Nike. However, Amer Sports, is 2.16 times more volatile than Nike Inc. It trades about 0.32 of its potential returns per unit of risk. Nike Inc is currently generating about -0.17 per unit of risk. If you would invest 1,510 in Amer Sports, on August 26, 2024 and sell it today you would earn a total of 920.00 from holding Amer Sports, or generate 60.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amer Sports, vs. Nike Inc
Performance |
| Timeline |
| Amer Sports, |
| Nike Inc |
Amer Sports, and Nike Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amer Sports, and Nike
The main advantage of trading using opposite Amer Sports, and Nike positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amer Sports, 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.| Amer Sports, vs. VF Corporation | Amer Sports, vs. Levi Strauss Co | Amer Sports, vs. Under Armour A | Amer Sports, vs. Oxford Industries |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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