Correlation Between Nike and Capitalworks Emerging
Can any of the company-specific risk be diversified away by investing in both Nike and Capitalworks Emerging 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 Capitalworks Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nike Inc and Capitalworks Emerging Markets, you can compare the effects of market volatilities on Nike and Capitalworks Emerging 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 Capitalworks Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nike and Capitalworks Emerging.
Diversification Opportunities for Nike and Capitalworks Emerging
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nike and Capitalworks is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Nike Inc and Capitalworks Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capitalworks Emerging 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 Capitalworks Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capitalworks Emerging has no effect on the direction of Nike i.e., Nike and Capitalworks Emerging go up and down completely randomly.
Pair Corralation between Nike and Capitalworks Emerging
If you would invest 1,057 in Capitalworks Emerging Markets on August 30, 2024 and sell it today you would earn a total of 0.00 from holding Capitalworks Emerging Markets or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 2.27% |
| Values | Daily Returns |
Nike Inc vs. Capitalworks Emerging Markets
Performance |
| Timeline |
| Nike Inc |
| Capitalworks Emerging |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Nike and Capitalworks Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nike and Capitalworks Emerging
The main advantage of trading using opposite Nike and Capitalworks Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nike position performs unexpectedly, Capitalworks Emerging 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 Capitalworks Emerging will offset losses from the drop in Capitalworks Emerging's long position.The idea behind Nike Inc and Capitalworks Emerging Markets pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Capitalworks Emerging vs. JJill Inc | Capitalworks Emerging vs. Nike Inc | Capitalworks Emerging vs. Duluth Holdings | Capitalworks Emerging vs. Stepan Company |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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