Correlation Between Nike and DTRGR
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By analyzing existing cross correlation between Nike Inc and DTRGR 365 07 APR 27, you can compare the effects of market volatilities on Nike and DTRGR 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 DTRGR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nike and DTRGR.
Diversification Opportunities for Nike and DTRGR
Good diversification
The 3 months correlation between Nike and DTRGR is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Nike Inc and DTRGR 365 07 APR 27 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DTRGR 365 07 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 DTRGR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DTRGR 365 07 has no effect on the direction of Nike i.e., Nike and DTRGR go up and down completely randomly.
Pair Corralation between Nike and DTRGR
Considering the 90-day investment horizon Nike Inc is expected to generate 8.16 times more return on investment than DTRGR. However, Nike is 8.16 times more volatile than DTRGR 365 07 APR 27. It trades about 0.08 of its potential returns per unit of risk. DTRGR 365 07 APR 27 is currently generating about -0.03 per unit of risk. If you would invest 7,719 in Nike Inc on September 4, 2024 and sell it today you would earn a total of 190.00 from holding Nike Inc or generate 2.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 33.33% |
| Values | Daily Returns |
Nike Inc vs. DTRGR 365 07 APR 27
Performance |
| Timeline |
| Nike Inc |
| DTRGR 365 07 |
Nike and DTRGR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nike and DTRGR
The main advantage of trading using opposite Nike and DTRGR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nike position performs unexpectedly, DTRGR 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 DTRGR will offset losses from the drop in DTRGR's long position.The idea behind Nike Inc and DTRGR 365 07 APR 27 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.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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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