Correlation Between Nike and Presidio Property
Can any of the company-specific risk be diversified away by investing in both Nike and Presidio Property 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 Presidio Property into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nike Inc and Presidio Property Trust, you can compare the effects of market volatilities on Nike and Presidio Property 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 Presidio Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nike and Presidio Property.
Diversification Opportunities for Nike and Presidio Property
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nike and Presidio is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Nike Inc and Presidio Property Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Presidio Property Trust 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 Presidio Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Presidio Property Trust has no effect on the direction of Nike i.e., Nike and Presidio Property go up and down completely randomly.
Pair Corralation between Nike and Presidio Property
Considering the 90-day investment horizon Nike Inc is expected to generate 0.28 times more return on investment than Presidio Property. However, Nike Inc is 3.54 times less risky than Presidio Property. It trades about 0.08 of its potential returns per unit of risk. Presidio Property Trust is currently generating about -0.06 per unit of risk. If you would invest 7,645 in Nike Inc on August 31, 2024 and sell it today you would earn a total of 189.00 from holding Nike Inc or generate 2.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nike Inc vs. Presidio Property Trust
Performance |
| Timeline |
| Nike Inc |
| Presidio Property Trust |
Nike and Presidio Property Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nike and Presidio Property
The main advantage of trading using opposite Nike and Presidio Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nike position performs unexpectedly, Presidio Property 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 Presidio Property will offset losses from the drop in Presidio Property's long position.The idea behind Nike Inc and Presidio Property Trust 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.| Presidio Property vs. Investcorp Credit Management | Presidio Property vs. Medalist Diversified Reit | Presidio Property vs. Mingzhu Logistics Holdings | Presidio Property vs. HUMANA INC |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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