Correlation Between Nike and Gladstone Investment
Can any of the company-specific risk be diversified away by investing in both Nike and Gladstone Investment 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 Gladstone Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nike Inc and Gladstone Investment, you can compare the effects of market volatilities on Nike and Gladstone Investment 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 Gladstone Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nike and Gladstone Investment.
Diversification Opportunities for Nike and Gladstone Investment
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nike and Gladstone is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Nike Inc and Gladstone Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gladstone Investment 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 Gladstone Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gladstone Investment has no effect on the direction of Nike i.e., Nike and Gladstone Investment go up and down completely randomly.
Pair Corralation between Nike and Gladstone Investment
Considering the 90-day investment horizon Nike Inc is expected to under-perform the Gladstone Investment. In addition to that, Nike is 2.88 times more volatile than Gladstone Investment. It trades about 0.0 of its total potential returns per unit of risk. Gladstone Investment is currently generating about 0.05 per unit of volatility. If you would invest 2,576 in Gladstone Investment on August 29, 2024 and sell it today you would earn a total of 15.00 from holding Gladstone Investment or generate 0.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nike Inc vs. Gladstone Investment
Performance |
| Timeline |
| Nike Inc |
| Gladstone Investment |
Nike and Gladstone Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nike and Gladstone Investment
The main advantage of trading using opposite Nike and Gladstone Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nike position performs unexpectedly, Gladstone Investment 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 Gladstone Investment will offset losses from the drop in Gladstone Investment's long position.The idea behind Nike Inc and Gladstone Investment 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.| Gladstone Investment vs. Citi Trends | Gladstone Investment vs. Ziff Davis | Gladstone Investment vs. Nike Inc | Gladstone Investment vs. Skechers USA |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |