Correlation Between Nike and Tsuruha Holdings
Can any of the company-specific risk be diversified away by investing in both Nike and Tsuruha Holdings 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 Tsuruha Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nike Inc and Tsuruha Holdings, you can compare the effects of market volatilities on Nike and Tsuruha Holdings 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 Tsuruha Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nike and Tsuruha Holdings.
Diversification Opportunities for Nike and Tsuruha Holdings
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Nike and Tsuruha is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Nike Inc and Tsuruha Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tsuruha Holdings 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 Tsuruha Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tsuruha Holdings has no effect on the direction of Nike i.e., Nike and Tsuruha Holdings go up and down completely randomly.
Pair Corralation between Nike and Tsuruha Holdings
Considering the 90-day investment horizon Nike Inc is expected to generate 0.2 times more return on investment than Tsuruha Holdings. However, Nike Inc is 5.01 times less risky than Tsuruha Holdings. It trades about -0.07 of its potential returns per unit of risk. Tsuruha Holdings is currently generating about -0.86 per unit of risk. If you would invest 11,908 in Nike Inc on September 12, 2024 and sell it today you would lose (4,023) from holding Nike Inc or give up 33.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 1.61% |
| Values | Daily Returns |
Nike Inc vs. Tsuruha Holdings
Performance |
| Timeline |
| Nike Inc |
| Tsuruha Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Nike and Tsuruha Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nike and Tsuruha Holdings
The main advantage of trading using opposite Nike and Tsuruha Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nike position performs unexpectedly, Tsuruha Holdings 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 Tsuruha Holdings will offset losses from the drop in Tsuruha Holdings' long position.The idea behind Nike Inc and Tsuruha Holdings 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.| Tsuruha Holdings vs. Evertz Technologies Limited | Tsuruha Holdings vs. Red Branch Technologies | Tsuruha Holdings vs. United Utilities Group | Tsuruha Holdings vs. Acm Research |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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