Correlation Between Grimoldi and NIKE
Can any of the company-specific risk be diversified away by investing in both Grimoldi 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 Grimoldi and NIKE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grimoldi SA and NIKE Inc, you can compare the effects of market volatilities on Grimoldi 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 Grimoldi with a short position of NIKE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grimoldi and NIKE.
Diversification Opportunities for Grimoldi and NIKE
Good diversification
The 3 months correlation between Grimoldi and NIKE is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Grimoldi SA and NIKE Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NIKE Inc and Grimoldi 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 Grimoldi SA 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 Grimoldi i.e., Grimoldi and NIKE go up and down completely randomly.
Pair Corralation between Grimoldi and NIKE
Assuming the 90 days trading horizon Grimoldi SA is expected to generate 1.3 times more return on investment than NIKE. However, Grimoldi is 1.3 times more volatile than NIKE Inc. It trades about 0.1 of its potential returns per unit of risk. NIKE Inc is currently generating about 0.0 per unit of risk. If you would invest 72,000 in Grimoldi SA on September 20, 2024 and sell it today you would earn a total of 63,000 from holding Grimoldi SA or generate 87.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.59% |
| Values | Daily Returns |
Grimoldi SA vs. NIKE Inc
Performance |
| Timeline |
| Grimoldi SA |
| NIKE Inc |
Grimoldi and NIKE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grimoldi and NIKE
The main advantage of trading using opposite Grimoldi and NIKE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grimoldi 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.| Grimoldi vs. NIKE Inc | Grimoldi vs. Agrometal SAI | Grimoldi vs. American Express Co | Grimoldi vs. QUALCOMM Incorporated |
| NIKE vs. Transportadora de Gas | NIKE vs. Agrometal SAI | NIKE vs. Compania de Transporte | NIKE vs. United States Steel |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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