Correlation Between PUMA SE and Nike
Can any of the company-specific risk be diversified away by investing in both PUMA SE 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 PUMA SE and Nike into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PUMA SE and Nike Inc, you can compare the effects of market volatilities on PUMA SE 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 PUMA SE with a short position of Nike. Check out your portfolio center. Please also check ongoing floating volatility patterns of PUMA SE and Nike.
Diversification Opportunities for PUMA SE and Nike
Pay attention - limited upside
The 3 months correlation between PUMA and Nike is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding PUMA SE and Nike Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nike Inc and PUMA SE 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 PUMA SE 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 PUMA SE i.e., PUMA SE and Nike go up and down completely randomly.
Pair Corralation between PUMA SE and Nike
Assuming the 90 days horizon PUMA SE is expected to generate 1.25 times more return on investment than Nike. However, PUMA SE is 1.25 times more volatile than Nike Inc. It trades about 0.0 of its potential returns per unit of risk. Nike Inc is currently generating about -0.02 per unit of risk. If you would invest 514.00 in PUMA SE on August 28, 2024 and sell it today you would lose (51.00) from holding PUMA SE or give up 9.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PUMA SE vs. Nike Inc
Performance |
| Timeline |
| PUMA SE |
| Nike Inc |
PUMA SE and Nike Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PUMA SE and Nike
The main advantage of trading using opposite PUMA SE and Nike positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PUMA SE 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.| PUMA SE vs. American Rebel Holdings | PUMA SE vs. American Rebel Holdings | PUMA SE vs. Crocs Inc | PUMA SE vs. On Holding |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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