Correlation Between 577778BQ5 and Nike
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By analyzing existing cross correlation between MAY DEPT STORES and Nike Inc, you can compare the effects of market volatilities on 577778BQ5 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 577778BQ5 with a short position of Nike. Check out your portfolio center. Please also check ongoing floating volatility patterns of 577778BQ5 and Nike.
Diversification Opportunities for 577778BQ5 and Nike
Very good diversification
The 3 months correlation between 577778BQ5 and Nike is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding MAY DEPT STORES and Nike Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nike Inc and 577778BQ5 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 MAY DEPT STORES 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 577778BQ5 i.e., 577778BQ5 and Nike go up and down completely randomly.
Pair Corralation between 577778BQ5 and Nike
Assuming the 90 days trading horizon MAY DEPT STORES is expected to under-perform the Nike. In addition to that, 577778BQ5 is 2.48 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 -0.02 per unit of volatility. If you would invest 8,132 in Nike Inc on September 3, 2024 and sell it today you would lose (255.00) from holding Nike Inc or give up 3.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 45.31% |
| Values | Daily Returns |
MAY DEPT STORES vs. Nike Inc
Performance |
| Timeline |
| MAY DEPT STORES |
| Nike Inc |
577778BQ5 and Nike Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 577778BQ5 and Nike
The main advantage of trading using opposite 577778BQ5 and Nike positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 577778BQ5 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 MAY DEPT STORES and Nike Inc 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.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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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