Correlation Between NIKE and Visa
Can any of the company-specific risk be diversified away by investing in both NIKE and Visa 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 Visa 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 Visa Inc CDR, you can compare the effects of market volatilities on NIKE and Visa 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 Visa. Check out your portfolio center. Please also check ongoing floating volatility patterns of NIKE and Visa.
Diversification Opportunities for NIKE and Visa
Pay attention - limited upside
The 3 months correlation between NIKE and Visa is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding NIKE Inc CDR and Visa Inc CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Visa Inc CDR 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 Visa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Visa Inc CDR has no effect on the direction of NIKE i.e., NIKE and Visa go up and down completely randomly.
Pair Corralation between NIKE and Visa
Assuming the 90 days trading horizon NIKE is expected to generate 2.6 times less return on investment than Visa. In addition to that, NIKE is 1.39 times more volatile than Visa Inc CDR. It trades about 0.1 of its total potential returns per unit of risk. Visa Inc CDR is currently generating about 0.36 per unit of volatility. If you would invest 2,756 in Visa Inc CDR on August 31, 2024 and sell it today you would earn a total of 265.00 from holding Visa Inc CDR or generate 9.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NIKE Inc CDR vs. Visa Inc CDR
Performance |
| Timeline |
| NIKE Inc CDR |
| Visa Inc CDR |
NIKE and Visa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NIKE and Visa
The main advantage of trading using opposite NIKE and Visa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NIKE position performs unexpectedly, Visa 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 Visa will offset losses from the drop in Visa's long position.| NIKE vs. Metalero Mining Corp | NIKE vs. High Liner Foods | NIKE vs. Capstone Mining Corp | NIKE vs. Gfl Environmental Holdings |
| Visa vs. iShares Canadian HYBrid | Visa vs. Brompton European Dividend | Visa vs. Solar Alliance Energy | Visa vs. PHN Multi Style All Cap |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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