Correlation Between Nike and Loop Media
Can any of the company-specific risk be diversified away by investing in both Nike and Loop Media 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 Loop Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nike Inc and Loop Media, you can compare the effects of market volatilities on Nike and Loop Media 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 Loop Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nike and Loop Media.
Diversification Opportunities for Nike and Loop Media
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Nike and Loop is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Nike Inc and Loop Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Loop Media 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 Loop Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Loop Media has no effect on the direction of Nike i.e., Nike and Loop Media go up and down completely randomly.
Pair Corralation between Nike and Loop Media
If you would invest 7,891 in Nike Inc on August 28, 2024 and sell it today you would earn a total of 35.00 from holding Nike Inc or generate 0.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Nike Inc vs. Loop Media
Performance |
| Timeline |
| Nike Inc |
| Loop Media |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Nike and Loop Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nike and Loop Media
The main advantage of trading using opposite Nike and Loop Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nike position performs unexpectedly, Loop Media 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 Loop Media will offset losses from the drop in Loop Media's long position.The idea behind Nike Inc and Loop Media 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.| Loop Media vs. Acco Brands | Loop Media vs. Lion One Metals | Loop Media vs. Afya | Loop Media vs. Aerofoam Metals |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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