Correlation Between NeuPath Health and NIKE
Can any of the company-specific risk be diversified away by investing in both NeuPath Health and NIKE 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 NeuPath Health and NIKE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NeuPath Health and NIKE Inc CDR, you can compare the effects of market volatilities on NeuPath Health and NIKE 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 NeuPath Health with a short position of NIKE. Check out your portfolio center. Please also check ongoing floating volatility patterns of NeuPath Health and NIKE.
Diversification Opportunities for NeuPath Health and NIKE
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NeuPath and NIKE is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding NeuPath Health and NIKE Inc CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NIKE Inc CDR and NeuPath Health 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 NeuPath Health are associated (or correlated) with NIKE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NIKE Inc CDR has no effect on the direction of NeuPath Health i.e., NeuPath Health and NIKE go up and down completely randomly.
Pair Corralation between NeuPath Health and NIKE
Assuming the 90 days trading horizon NeuPath Health is expected to generate 3.06 times more return on investment than NIKE. However, NeuPath Health is 3.06 times more volatile than NIKE Inc CDR. It trades about 0.09 of its potential returns per unit of risk. NIKE Inc CDR is currently generating about -0.21 per unit of risk. If you would invest 19.00 in NeuPath Health on October 24, 2024 and sell it today you would earn a total of 1.00 from holding NeuPath Health or generate 5.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NeuPath Health vs. NIKE Inc CDR
Performance |
| Timeline |
| NeuPath Health |
| NIKE Inc CDR |
NeuPath Health and NIKE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NeuPath Health and NIKE
The main advantage of trading using opposite NeuPath Health and NIKE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NeuPath Health position performs unexpectedly, NIKE 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 NIKE will offset losses from the drop in NIKE's long position.| NeuPath Health vs. Precision Drilling | NeuPath Health vs. Maple Leaf Foods | NeuPath Health vs. Lion One Metals | NeuPath Health vs. AGF Management Limited |
| NIKE vs. Canlan Ice Sports | NIKE vs. Orbit Garant Drilling | NIKE vs. Air Canada | NIKE vs. Diamond Estates Wines |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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