Correlation Between Strategic Investments and Nike
Can any of the company-specific risk be diversified away by investing in both Strategic Investments 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 Strategic Investments and Nike into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Strategic Investments AS and Nike Inc, you can compare the effects of market volatilities on Strategic Investments 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 Strategic Investments with a short position of Nike. Check out your portfolio center. Please also check ongoing floating volatility patterns of Strategic Investments and Nike.
Diversification Opportunities for Strategic Investments and Nike
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Strategic and Nike is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Strategic Investments AS and Nike Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nike Inc and Strategic Investments 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 Strategic Investments AS 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 Strategic Investments i.e., Strategic Investments and Nike go up and down completely randomly.
Pair Corralation between Strategic Investments and Nike
Assuming the 90 days horizon Strategic Investments is expected to generate 2.87 times less return on investment than Nike. In addition to that, Strategic Investments is 2.16 times more volatile than Nike Inc. It trades about 0.0 of its total potential returns per unit of risk. Nike Inc is currently generating about 0.02 per unit of volatility. If you would invest 7,083 in Nike Inc on September 29, 2024 and sell it today you would earn a total of 257.00 from holding Nike Inc or generate 3.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Strategic Investments AS vs. Nike Inc
Performance |
| Timeline |
| Strategic Investments |
| Nike Inc |
Strategic Investments and Nike Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Strategic Investments and Nike
The main advantage of trading using opposite Strategic Investments and Nike positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Strategic Investments 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.| Strategic Investments vs. Blackstone Group | Strategic Investments vs. The Bank of | Strategic Investments vs. Ameriprise Financial | Strategic Investments vs. T Rowe Price |
| Nike vs. Strategic Investments AS | Nike vs. alstria office REIT AG | Nike vs. MAGIC SOFTWARE ENTR | Nike vs. PennyMac Mortgage Investment |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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