Correlation Between United Homes and Nike
Can any of the company-specific risk be diversified away by investing in both United Homes 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 United Homes and Nike into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Homes Group and Nike Inc, you can compare the effects of market volatilities on United Homes 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 United Homes with a short position of Nike. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Homes and Nike.
Diversification Opportunities for United Homes and Nike
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between United and Nike is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding United Homes Group and Nike Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nike Inc and United Homes 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 United Homes Group 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 United Homes i.e., United Homes and Nike go up and down completely randomly.
Pair Corralation between United Homes and Nike
Considering the 90-day investment horizon United Homes Group is expected to generate 1.81 times more return on investment than Nike. However, United Homes is 1.81 times more volatile than Nike Inc. It trades about 0.01 of its potential returns per unit of risk. Nike Inc is currently generating about -0.06 per unit of risk. If you would invest 702.00 in United Homes Group on September 2, 2024 and sell it today you would lose (64.00) from holding United Homes Group or give up 9.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Homes Group vs. Nike Inc
Performance |
| Timeline |
| United Homes Group |
| Nike Inc |
United Homes and Nike Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Homes and Nike
The main advantage of trading using opposite United Homes and Nike positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Homes 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.| United Homes vs. VF Corporation | United Homes vs. Levi Strauss Co | United Homes vs. Columbia Sportswear | United Homes vs. Oxford Industries |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |