Correlation Between SP Merval and NIKE
Can any of the company-specific risk be diversified away by investing in both SP Merval 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 SP Merval and NIKE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SP Merval and NIKE Inc, you can compare the effects of market volatilities on SP Merval 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 SP Merval with a short position of NIKE. Check out your portfolio center. Please also check ongoing floating volatility patterns of SP Merval and NIKE.
Diversification Opportunities for SP Merval and NIKE
Pay attention - limited upside
The 3 months correlation between MERV and NIKE is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SP Merval and NIKE Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NIKE Inc and SP Merval 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 SP Merval 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 SP Merval i.e., SP Merval and NIKE go up and down completely randomly.
Pair Corralation between SP Merval and NIKE
If you would invest 695,000 in NIKE Inc on September 22, 2024 and sell it today you would earn a total of 47,000 from holding NIKE Inc or generate 6.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SP Merval vs. NIKE Inc
Performance |
| Timeline |
SP Merval and NIKE Volatility Contrast
Predicted Return Density |
| Returns |
SP Merval
Pair trading matchups for SP Merval
NIKE Inc
Pair trading matchups for NIKE
Pair Trading with SP Merval and NIKE
The main advantage of trading using opposite SP Merval and NIKE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SP Merval 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.| SP Merval vs. Telecom Argentina | SP Merval vs. Transportadora de Gas | SP Merval vs. Compania de Transporte | SP Merval vs. Harmony Gold Mining |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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