Correlation Between Nike and Telia Company
Can any of the company-specific risk be diversified away by investing in both Nike and Telia Company 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 Telia Company into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nike Inc and Telia Company AB, you can compare the effects of market volatilities on Nike and Telia Company 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 Telia Company. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nike and Telia Company.
Diversification Opportunities for Nike and Telia Company
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Nike and Telia is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Nike Inc and Telia Company AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telia Company 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 Telia Company. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Telia Company has no effect on the direction of Nike i.e., Nike and Telia Company go up and down completely randomly.
Pair Corralation between Nike and Telia Company
If you would invest 7,558 in Nike Inc on November 27, 2024 and sell it today you would earn a total of 92.00 from holding Nike Inc or generate 1.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Nike Inc vs. Telia Company AB
Performance |
| Timeline |
| Nike Inc |
| Telia Company |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Nike and Telia Company Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nike and Telia Company
The main advantage of trading using opposite Nike and Telia Company positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nike position performs unexpectedly, Telia Company 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 Telia Company will offset losses from the drop in Telia Company's long position.The idea behind Nike Inc and Telia Company AB 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.| Telia Company vs. Emerson Radio | Telia Company vs. Canlan Ice Sports | Telia Company vs. NL Industries | Telia Company vs. Codexis |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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