Correlation Between NIKE and Teladoc Health
Can any of the company-specific risk be diversified away by investing in both NIKE and Teladoc Health 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 Teladoc Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NIKE Inc and Teladoc Health, you can compare the effects of market volatilities on NIKE and Teladoc Health 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 Teladoc Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of NIKE and Teladoc Health.
Diversification Opportunities for NIKE and Teladoc Health
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between NIKE and Teladoc is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding NIKE Inc and Teladoc Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teladoc Health 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 Teladoc Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Teladoc Health has no effect on the direction of NIKE i.e., NIKE and Teladoc Health go up and down completely randomly.
Pair Corralation between NIKE and Teladoc Health
Assuming the 90 days trading horizon NIKE Inc is expected to generate 0.44 times more return on investment than Teladoc Health. However, NIKE Inc is 2.29 times less risky than Teladoc Health. It trades about 0.13 of its potential returns per unit of risk. Teladoc Health is currently generating about -0.25 per unit of risk. If you would invest 4,577 in NIKE Inc on September 25, 2024 and sell it today you would earn a total of 212.00 from holding NIKE Inc or generate 4.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
NIKE Inc vs. Teladoc Health
Performance |
| Timeline |
| NIKE Inc |
| Teladoc Health |
NIKE and Teladoc Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NIKE and Teladoc Health
The main advantage of trading using opposite NIKE and Teladoc Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NIKE position performs unexpectedly, Teladoc Health 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 Teladoc Health will offset losses from the drop in Teladoc Health's long position.| NIKE vs. Teladoc Health | NIKE vs. Hospital Mater Dei | NIKE vs. Align Technology | NIKE vs. UnitedHealth Group Incorporated |
| Teladoc Health vs. Tesla Inc | Teladoc Health vs. Accenture plc | Teladoc Health vs. Visa Inc | Teladoc Health vs. salesforce inc |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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