Correlation Between NIKE and NGEx Minerals
Can any of the company-specific risk be diversified away by investing in both NIKE and NGEx Minerals 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 NGEx Minerals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NIKE Inc CDR and NGEx Minerals, you can compare the effects of market volatilities on NIKE and NGEx Minerals 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 NGEx Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of NIKE and NGEx Minerals.
Diversification Opportunities for NIKE and NGEx Minerals
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NIKE and NGEx is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding NIKE Inc CDR and NGEx Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NGEx Minerals 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 CDR are associated (or correlated) with NGEx Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NGEx Minerals has no effect on the direction of NIKE i.e., NIKE and NGEx Minerals go up and down completely randomly.
Pair Corralation between NIKE and NGEx Minerals
Assuming the 90 days trading horizon NIKE Inc CDR is expected to under-perform the NGEx Minerals. But the stock apears to be less risky and, when comparing its historical volatility, NIKE Inc CDR is 1.06 times less risky than NGEx Minerals. The stock trades about -0.18 of its potential returns per unit of risk. The NGEx Minerals is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 1,113 in NGEx Minerals on August 28, 2024 and sell it today you would earn a total of 141.00 from holding NGEx Minerals or generate 12.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NIKE Inc CDR vs. NGEx Minerals
Performance |
| Timeline |
| NIKE Inc CDR |
| NGEx Minerals |
NIKE and NGEx Minerals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NIKE and NGEx Minerals
The main advantage of trading using opposite NIKE and NGEx Minerals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NIKE position performs unexpectedly, NGEx Minerals 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 NGEx Minerals will offset losses from the drop in NGEx Minerals' long position.| NIKE vs. Brookfield Office Properties | NIKE vs. Data Communications Management | NIKE vs. Advent Wireless | NIKE vs. Cogeco Communications |
| NGEx Minerals vs. Teck Resources Limited | NGEx Minerals vs. Ivanhoe Mines | NGEx Minerals vs. Filo Mining Corp | NGEx Minerals vs. Sigma Lithium Resources |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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