Correlation Between STRAYER EDUCATION and Nike
Can any of the company-specific risk be diversified away by investing in both STRAYER EDUCATION 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 STRAYER EDUCATION and Nike into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STRAYER EDUCATION and Nike Inc, you can compare the effects of market volatilities on STRAYER EDUCATION 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 STRAYER EDUCATION with a short position of Nike. Check out your portfolio center. Please also check ongoing floating volatility patterns of STRAYER EDUCATION and Nike.
Diversification Opportunities for STRAYER EDUCATION and Nike
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between STRAYER and Nike is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding STRAYER EDUCATION and Nike Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nike Inc and STRAYER EDUCATION 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 STRAYER EDUCATION 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 STRAYER EDUCATION i.e., STRAYER EDUCATION and Nike go up and down completely randomly.
Pair Corralation between STRAYER EDUCATION and Nike
Assuming the 90 days trading horizon STRAYER EDUCATION is expected to generate 1.07 times more return on investment than Nike. However, STRAYER EDUCATION is 1.07 times more volatile than Nike Inc. It trades about 0.02 of its potential returns per unit of risk. Nike Inc is currently generating about -0.03 per unit of risk. If you would invest 8,167 in STRAYER EDUCATION on November 5, 2024 and sell it today you would earn a total of 1,283 from holding STRAYER EDUCATION or generate 15.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
STRAYER EDUCATION vs. Nike Inc
Performance |
| Timeline |
| STRAYER EDUCATION |
| Nike Inc |
STRAYER EDUCATION and Nike Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STRAYER EDUCATION and Nike
The main advantage of trading using opposite STRAYER EDUCATION and Nike positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STRAYER EDUCATION 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.| STRAYER EDUCATION vs. Haier Smart Home | STRAYER EDUCATION vs. ATOSS SOFTWARE | STRAYER EDUCATION vs. CAIRN HOMES EO | STRAYER EDUCATION vs. Aedas Homes SA |
| Nike vs. UNITED RENTALS | Nike vs. Air Transport Services | Nike vs. Air Lease | Nike vs. Jacquet Metal Service |
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 Stocks Directory module to find actively traded stocks across global markets.
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