Correlation Between 361 Degrees and Nike
Can any of the company-specific risk be diversified away by investing in both 361 Degrees 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 361 Degrees and Nike into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 361 Degrees International and Nike Inc, you can compare the effects of market volatilities on 361 Degrees 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 361 Degrees with a short position of Nike. Check out your portfolio center. Please also check ongoing floating volatility patterns of 361 Degrees and Nike.
Diversification Opportunities for 361 Degrees and Nike
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 361 and Nike is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding 361 Degrees International and Nike Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nike Inc and 361 Degrees 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 361 Degrees International 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 361 Degrees i.e., 361 Degrees and Nike go up and down completely randomly.
Pair Corralation between 361 Degrees and Nike
Assuming the 90 days horizon 361 Degrees International is expected to under-perform the Nike. But the pink sheet apears to be less risky and, when comparing its historical volatility, 361 Degrees International is 1.23 times less risky than Nike. The pink sheet trades about -0.12 of its potential returns per unit of risk. The Nike Inc is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 7,558 in Nike Inc on November 28, 2024 and sell it today you would earn a total of 559.00 from holding Nike Inc or generate 7.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
361 Degrees International vs. Nike Inc
Performance |
| Timeline |
| 361 Degrees International |
| Nike Inc |
361 Degrees and Nike Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 361 Degrees and Nike
The main advantage of trading using opposite 361 Degrees and Nike positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 361 Degrees 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.| 361 Degrees vs. Crocs Inc | 361 Degrees vs. On Holding | 361 Degrees vs. Deckers Outdoor | 361 Degrees vs. Adidas AG ADR |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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