Correlation Between Mill City and Nike
Can any of the company-specific risk be diversified away by investing in both Mill City 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 Mill City and Nike into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mill City Ventures and Nike Inc, you can compare the effects of market volatilities on Mill City 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 Mill City with a short position of Nike. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mill City and Nike.
Diversification Opportunities for Mill City and Nike
Modest diversification
The 3 months correlation between Mill and Nike is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Mill City Ventures and Nike Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nike Inc and Mill City 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 Mill City Ventures 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 Mill City i.e., Mill City and Nike go up and down completely randomly.
Pair Corralation between Mill City and Nike
Given the investment horizon of 90 days Mill City Ventures is expected to under-perform the Nike. In addition to that, Mill City is 2.43 times more volatile than Nike Inc. It trades about -0.03 of its total potential returns per unit of risk. Nike Inc is currently generating about 0.03 per unit of volatility. If you would invest 7,806 in Nike Inc on September 2, 2024 and sell it today you would earn a total of 71.00 from holding Nike Inc or generate 0.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mill City Ventures vs. Nike Inc
Performance |
| Timeline |
| Mill City Ventures |
| Nike Inc |
Mill City and Nike Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mill City and Nike
The main advantage of trading using opposite Mill City and Nike positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mill City 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.| Mill City vs. Consumer Portfolio Services | Mill City vs. Atlanticus Holdings Corp | Mill City vs. Nelnet Inc | Mill City vs. Senmiao Technology |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences |