Correlation Between NIKE and Autopistas Del
Can any of the company-specific risk be diversified away by investing in both NIKE and Autopistas Del 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 Autopistas Del into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NIKE Inc and Autopistas del Sol, you can compare the effects of market volatilities on NIKE and Autopistas Del 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 Autopistas Del. Check out your portfolio center. Please also check ongoing floating volatility patterns of NIKE and Autopistas Del.
Diversification Opportunities for NIKE and Autopistas Del
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between NIKE and Autopistas is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding NIKE Inc and Autopistas del Sol in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Autopistas del Sol 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 Autopistas Del. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Autopistas del Sol has no effect on the direction of NIKE i.e., NIKE and Autopistas Del go up and down completely randomly.
Pair Corralation between NIKE and Autopistas Del
Assuming the 90 days trading horizon NIKE Inc is expected to generate 0.71 times more return on investment than Autopistas Del. However, NIKE Inc is 1.4 times less risky than Autopistas Del. It trades about 0.23 of its potential returns per unit of risk. Autopistas del Sol is currently generating about 0.09 per unit of risk. If you would invest 688,000 in NIKE Inc on September 19, 2024 and sell it today you would earn a total of 62,000 from holding NIKE Inc or generate 9.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NIKE Inc vs. Autopistas del Sol
Performance |
| Timeline |
| NIKE Inc |
| Autopistas del Sol |
NIKE and Autopistas Del Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NIKE and Autopistas Del
The main advantage of trading using opposite NIKE and Autopistas Del positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NIKE position performs unexpectedly, Autopistas Del 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 Autopistas Del will offset losses from the drop in Autopistas Del's long position.| NIKE vs. Compania de Transporte | NIKE vs. Transportadora de Gas | NIKE vs. Harmony Gold Mining | NIKE vs. Agrometal SAI |
| Autopistas Del vs. Transportadora de Gas | Autopistas Del vs. Agrometal SAI | Autopistas Del vs. Compania de Transporte | Autopistas Del 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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