Correlation Between Nike and 512807AT5
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By analyzing existing cross correlation between Nike Inc and LAM RESEARCH PORATION, you can compare the effects of market volatilities on Nike and 512807AT5 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 512807AT5. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nike and 512807AT5.
Diversification Opportunities for Nike and 512807AT5
Very weak diversification
The 3 months correlation between Nike and 512807AT5 is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Nike Inc and LAM RESEARCH PORATION in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LAM RESEARCH PORATION 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 512807AT5. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LAM RESEARCH PORATION has no effect on the direction of Nike i.e., Nike and 512807AT5 go up and down completely randomly.
Pair Corralation between Nike and 512807AT5
Considering the 90-day investment horizon Nike Inc is expected to generate 1.2 times more return on investment than 512807AT5. However, Nike is 1.2 times more volatile than LAM RESEARCH PORATION. It trades about 0.03 of its potential returns per unit of risk. LAM RESEARCH PORATION is currently generating about -0.03 per unit of risk. If you would invest 7,621 in Nike Inc on September 12, 2024 and sell it today you would earn a total of 53.00 from holding Nike Inc or generate 0.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 85.71% |
| Values | Daily Returns |
Nike Inc vs. LAM RESEARCH PORATION
Performance |
| Timeline |
| Nike Inc |
| LAM RESEARCH PORATION |
Nike and 512807AT5 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nike and 512807AT5
The main advantage of trading using opposite Nike and 512807AT5 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nike position performs unexpectedly, 512807AT5 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 512807AT5 will offset losses from the drop in 512807AT5's long position.The idea behind Nike Inc and LAM RESEARCH PORATION 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.| 512807AT5 vs. Nike Inc | 512807AT5 vs. Air Lease | 512807AT5 vs. Tandy Leather Factory | 512807AT5 vs. Under Armour C |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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