Correlation Between OPERA SOFTWARE and Nike
Can any of the company-specific risk be diversified away by investing in both OPERA SOFTWARE 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 OPERA SOFTWARE and Nike into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between OPERA SOFTWARE and Nike Inc, you can compare the effects of market volatilities on OPERA SOFTWARE 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 OPERA SOFTWARE with a short position of Nike. Check out your portfolio center. Please also check ongoing floating volatility patterns of OPERA SOFTWARE and Nike.
Diversification Opportunities for OPERA SOFTWARE and Nike
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between OPERA and Nike is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding OPERA SOFTWARE and Nike Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nike Inc and OPERA SOFTWARE 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 OPERA SOFTWARE 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 has no effect on the direction of OPERA SOFTWARE i.e., OPERA SOFTWARE and Nike go up and down completely randomly.
Pair Corralation between OPERA SOFTWARE and Nike
Assuming the 90 days trading horizon OPERA SOFTWARE is expected to generate 1.38 times more return on investment than Nike. However, OPERA SOFTWARE is 1.38 times more volatile than Nike Inc. It trades about -0.05 of its potential returns per unit of risk. Nike Inc is currently generating about -0.33 per unit of risk. If you would invest 65.00 in OPERA SOFTWARE on October 13, 2024 and sell it today you would lose (1.00) from holding OPERA SOFTWARE or give up 1.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
OPERA SOFTWARE vs. Nike Inc
Performance |
| Timeline |
| OPERA SOFTWARE |
| Nike Inc |
OPERA SOFTWARE and Nike Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OPERA SOFTWARE and Nike
The main advantage of trading using opposite OPERA SOFTWARE and Nike positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OPERA SOFTWARE 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.| OPERA SOFTWARE vs. BOS BETTER ONLINE | OPERA SOFTWARE vs. Samsung Electronics Co | OPERA SOFTWARE vs. Electronic Arts | OPERA SOFTWARE vs. ELECTRONIC ARTS |
| Nike vs. OPERA SOFTWARE | Nike vs. AXWAY SOFTWARE EO | Nike vs. GigaMedia | Nike vs. Magic Software Enterprises |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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