Correlation Between Teladoc Health and NIKE
Can any of the company-specific risk be diversified away by investing in both Teladoc Health 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 Teladoc Health and NIKE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Teladoc Health and NIKE Inc, you can compare the effects of market volatilities on Teladoc Health 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 Teladoc Health with a short position of NIKE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Teladoc Health and NIKE.
Diversification Opportunities for Teladoc Health and NIKE
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Teladoc and NIKE is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Teladoc Health and NIKE Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NIKE Inc and Teladoc Health 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 Teladoc Health 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 Teladoc Health i.e., Teladoc Health and NIKE go up and down completely randomly.
Pair Corralation between Teladoc Health and NIKE
Assuming the 90 days trading horizon Teladoc Health is expected to under-perform the NIKE. In addition to that, Teladoc Health is 2.2 times more volatile than NIKE Inc. It trades about -0.02 of its total potential returns per unit of risk. NIKE Inc is currently generating about -0.03 per unit of volatility. If you would invest 6,528 in NIKE Inc on October 13, 2024 and sell it today you would lose (2,179) from holding NIKE Inc or give up 33.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Teladoc Health vs. NIKE Inc
Performance |
| Timeline |
| Teladoc Health |
| NIKE Inc |
Teladoc Health and NIKE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Teladoc Health and NIKE
The main advantage of trading using opposite Teladoc Health and NIKE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Teladoc Health 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.| Teladoc Health vs. Ross Stores | Teladoc Health vs. Check Point Software | Teladoc Health vs. British American Tobacco | Teladoc Health vs. United Natural Foods, |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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