Correlation Between Queens Road and NIKE
Can any of the company-specific risk be diversified away by investing in both Queens Road 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 Queens Road and NIKE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Queens Road Capital and NIKE Inc CDR, you can compare the effects of market volatilities on Queens Road 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 Queens Road with a short position of NIKE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Queens Road and NIKE.
Diversification Opportunities for Queens Road and NIKE
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Queens and NIKE is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Queens Road Capital 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 Queens Road 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 Queens Road Capital 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 Queens Road i.e., Queens Road and NIKE go up and down completely randomly.
Pair Corralation between Queens Road and NIKE
Assuming the 90 days trading horizon Queens Road Capital is expected to generate 2.84 times more return on investment than NIKE. However, Queens Road is 2.84 times more volatile than NIKE Inc CDR. It trades about 0.07 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 710.00 in Queens Road Capital on October 24, 2024 and sell it today you would earn a total of 25.00 from holding Queens Road Capital or generate 3.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Queens Road Capital vs. NIKE Inc CDR
Performance |
| Timeline |
| Queens Road Capital |
| NIKE Inc CDR |
Queens Road and NIKE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Queens Road and NIKE
The main advantage of trading using opposite Queens Road and NIKE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Queens Road 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.The idea behind Queens Road Capital and NIKE Inc CDR 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.| 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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