Correlation Between Nike and ALBERTSONS
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By analyzing existing cross correlation between Nike Inc and ALBERTSONS INC 75, you can compare the effects of market volatilities on Nike and ALBERTSONS 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 ALBERTSONS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nike and ALBERTSONS.
Diversification Opportunities for Nike and ALBERTSONS
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Nike and ALBERTSONS is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Nike Inc and ALBERTSONS INC 75 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALBERTSONS INC 75 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 ALBERTSONS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALBERTSONS INC 75 has no effect on the direction of Nike i.e., Nike and ALBERTSONS go up and down completely randomly.
Pair Corralation between Nike and ALBERTSONS
Considering the 90-day investment horizon Nike Inc is expected to under-perform the ALBERTSONS. In addition to that, Nike is 5.63 times more volatile than ALBERTSONS INC 75. It trades about -0.04 of its total potential returns per unit of risk. ALBERTSONS INC 75 is currently generating about 0.01 per unit of volatility. If you would invest 10,155 in ALBERTSONS INC 75 on September 14, 2024 and sell it today you would earn a total of 47.00 from holding ALBERTSONS INC 75 or generate 0.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 65.8% |
| Values | Daily Returns |
Nike Inc vs. ALBERTSONS INC 75
Performance |
| Timeline |
| Nike Inc |
| ALBERTSONS INC 75 |
Nike and ALBERTSONS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nike and ALBERTSONS
The main advantage of trading using opposite Nike and ALBERTSONS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nike position performs unexpectedly, ALBERTSONS 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 ALBERTSONS will offset losses from the drop in ALBERTSONS's long position.The idea behind Nike Inc and ALBERTSONS INC 75 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.| ALBERTSONS vs. Nike Inc | ALBERTSONS vs. Acme United | ALBERTSONS vs. Vera Bradley | ALBERTSONS vs. Edgewell Personal Care |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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