Correlation Between QUALCOMM Incorporated and NIKE
Can any of the company-specific risk be diversified away by investing in both QUALCOMM Incorporated 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 QUALCOMM Incorporated and NIKE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between QUALCOMM Incorporated and NIKE Inc, you can compare the effects of market volatilities on QUALCOMM Incorporated 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 QUALCOMM Incorporated with a short position of NIKE. Check out your portfolio center. Please also check ongoing floating volatility patterns of QUALCOMM Incorporated and NIKE.
Diversification Opportunities for QUALCOMM Incorporated and NIKE
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between QUALCOMM and NIKE is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding QUALCOMM Incorporated and NIKE Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NIKE Inc and QUALCOMM Incorporated 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 QUALCOMM Incorporated 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 QUALCOMM Incorporated i.e., QUALCOMM Incorporated and NIKE go up and down completely randomly.
Pair Corralation between QUALCOMM Incorporated and NIKE
Assuming the 90 days trading horizon QUALCOMM Incorporated is expected to under-perform the NIKE. In addition to that, QUALCOMM Incorporated is 1.31 times more volatile than NIKE Inc. It trades about 0.0 of its total potential returns per unit of risk. NIKE Inc is currently generating about 0.12 per unit of volatility. If you would invest 714,000 in NIKE Inc on September 23, 2024 and sell it today you would earn a total of 28,000 from holding NIKE Inc or generate 3.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
QUALCOMM Incorporated vs. NIKE Inc
Performance |
| Timeline |
| QUALCOMM Incorporated |
| NIKE Inc |
QUALCOMM Incorporated and NIKE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with QUALCOMM Incorporated and NIKE
The main advantage of trading using opposite QUALCOMM Incorporated and NIKE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if QUALCOMM Incorporated 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.| QUALCOMM Incorporated vs. Alibaba Group Holding | QUALCOMM Incorporated vs. Apple Inc DRC | QUALCOMM Incorporated vs. Alphabet Inc Class A CEDEAR | QUALCOMM Incorporated vs. Amazon Inc |
| NIKE vs. Transportadora de Gas | NIKE vs. Harmony Gold Mining | NIKE vs. Agrometal SAI | NIKE vs. Telecom Argentina |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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