Correlation Between CNVISION MEDIA and Nike
Can any of the company-specific risk be diversified away by investing in both CNVISION MEDIA 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 CNVISION MEDIA and Nike into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CNVISION MEDIA and Nike Inc, you can compare the effects of market volatilities on CNVISION MEDIA 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 CNVISION MEDIA with a short position of Nike. Check out your portfolio center. Please also check ongoing floating volatility patterns of CNVISION MEDIA and Nike.
Diversification Opportunities for CNVISION MEDIA and Nike
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CNVISION and Nike is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding CNVISION MEDIA and Nike Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nike Inc and CNVISION MEDIA 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 CNVISION MEDIA 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 CNVISION MEDIA i.e., CNVISION MEDIA and Nike go up and down completely randomly.
Pair Corralation between CNVISION MEDIA and Nike
Assuming the 90 days trading horizon CNVISION MEDIA is expected to generate 1.69 times more return on investment than Nike. However, CNVISION MEDIA is 1.69 times more volatile than Nike Inc. It trades about 0.01 of its potential returns per unit of risk. Nike Inc is currently generating about -0.05 per unit of risk. If you would invest 6.38 in CNVISION MEDIA on October 25, 2024 and sell it today you would lose (0.48) from holding CNVISION MEDIA or give up 7.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CNVISION MEDIA vs. Nike Inc
Performance |
| Timeline |
| CNVISION MEDIA |
| Nike Inc |
CNVISION MEDIA and Nike Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CNVISION MEDIA and Nike
The main advantage of trading using opposite CNVISION MEDIA and Nike positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CNVISION MEDIA 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.| CNVISION MEDIA vs. betterU Education Corp | CNVISION MEDIA vs. TEXAS ROADHOUSE | CNVISION MEDIA vs. BII Railway Transportation | CNVISION MEDIA vs. Texas Roadhouse |
| Nike vs. Entravision Communications | Nike vs. SCOTT TECHNOLOGY | Nike vs. COMPUTERSHARE | Nike vs. Ribbon Communications |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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