Correlation Between Nike and 594918AR5
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By analyzing existing cross correlation between Nike Inc and MICROSOFT P 35, you can compare the effects of market volatilities on Nike and 594918AR5 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 594918AR5. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nike and 594918AR5.
Diversification Opportunities for Nike and 594918AR5
Average diversification
The 3 months correlation between Nike and 594918AR5 is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Nike Inc and MICROSOFT P 35 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MICROSOFT P 35 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 594918AR5. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MICROSOFT P 35 has no effect on the direction of Nike i.e., Nike and 594918AR5 go up and down completely randomly.
Pair Corralation between Nike and 594918AR5
Considering the 90-day investment horizon Nike Inc is expected to generate 1.19 times more return on investment than 594918AR5. However, Nike is 1.19 times more volatile than MICROSOFT P 35. It trades about 0.15 of its potential returns per unit of risk. MICROSOFT P 35 is currently generating about -0.02 per unit of risk. If you would invest 7,451 in Nike Inc on September 18, 2024 and sell it today you would earn a total of 349.00 from holding Nike Inc or generate 4.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 90.48% |
| Values | Daily Returns |
Nike Inc vs. MICROSOFT P 35
Performance |
| Timeline |
| Nike Inc |
| MICROSOFT P 35 |
Nike and 594918AR5 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nike and 594918AR5
The main advantage of trading using opposite Nike and 594918AR5 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nike position performs unexpectedly, 594918AR5 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 594918AR5 will offset losses from the drop in 594918AR5's long position.The idea behind Nike Inc and MICROSOFT P 35 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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