Correlation Between Visteon Corp and Nike
Can any of the company-specific risk be diversified away by investing in both Visteon Corp 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 Visteon Corp and Nike into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Visteon Corp and Nike Inc, you can compare the effects of market volatilities on Visteon Corp 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 Visteon Corp with a short position of Nike. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visteon Corp and Nike.
Diversification Opportunities for Visteon Corp and Nike
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Visteon and Nike is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Visteon Corp and Nike Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nike Inc and Visteon Corp 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 Visteon Corp 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 Visteon Corp i.e., Visteon Corp and Nike go up and down completely randomly.
Pair Corralation between Visteon Corp and Nike
Allowing for the 90-day total investment horizon Visteon Corp is expected to under-perform the Nike. In addition to that, Visteon Corp is 1.28 times more volatile than Nike Inc. It trades about -0.01 of its total potential returns per unit of risk. Nike Inc is currently generating about 0.07 per unit of volatility. If you would invest 7,627 in Nike Inc on September 13, 2024 and sell it today you would earn a total of 169.00 from holding Nike Inc or generate 2.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Visteon Corp vs. Nike Inc
Performance |
| Timeline |
| Visteon Corp |
| Nike Inc |
Visteon Corp and Nike Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visteon Corp and Nike
The main advantage of trading using opposite Visteon Corp and Nike positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visteon Corp 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.| Visteon Corp vs. Ford Motor | Visteon Corp vs. General Motors | Visteon Corp vs. Goodyear Tire Rubber | Visteon Corp vs. Li Auto |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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