Correlation Between NIKE and Charter Communications
Can any of the company-specific risk be diversified away by investing in both NIKE and Charter Communications 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 NIKE and Charter Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NIKE Inc and Charter Communications, you can compare the effects of market volatilities on NIKE and Charter Communications 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 NIKE with a short position of Charter Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of NIKE and Charter Communications.
Diversification Opportunities for NIKE and Charter Communications
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between NIKE and Charter is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding NIKE Inc and Charter Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Charter Communications and NIKE 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 NIKE Inc are associated (or correlated) with Charter Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Charter Communications has no effect on the direction of NIKE i.e., NIKE and Charter Communications go up and down completely randomly.
Pair Corralation between NIKE and Charter Communications
If you would invest 2,720 in Charter Communications on September 25, 2024 and sell it today you would earn a total of 908.00 from holding Charter Communications or generate 33.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
NIKE Inc vs. Charter Communications
Performance |
| Timeline |
| NIKE Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Charter Communications |
NIKE and Charter Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NIKE and Charter Communications
The main advantage of trading using opposite NIKE and Charter Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NIKE position performs unexpectedly, Charter Communications 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 Charter Communications will offset losses from the drop in Charter Communications' long position.| NIKE vs. Teladoc Health | NIKE vs. Hospital Mater Dei | NIKE vs. Align Technology | NIKE vs. UnitedHealth Group Incorporated |
| Charter Communications vs. Comcast | Charter Communications vs. Warner Music Group | Charter Communications vs. Paramount Global | Charter Communications vs. DCVY34 |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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