Correlation Between Hoteles City and NIKE
Can any of the company-specific risk be diversified away by investing in both Hoteles City 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 Hoteles City and NIKE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hoteles City Express and NIKE Inc, you can compare the effects of market volatilities on Hoteles City 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 Hoteles City with a short position of NIKE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hoteles City and NIKE.
Diversification Opportunities for Hoteles City and NIKE
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hoteles and NIKE is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Hoteles City Express and NIKE Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NIKE Inc and Hoteles City 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 Hoteles City Express 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 Hoteles City i.e., Hoteles City and NIKE go up and down completely randomly.
Pair Corralation between Hoteles City and NIKE
Assuming the 90 days trading horizon Hoteles City Express is expected to generate 0.8 times more return on investment than NIKE. However, Hoteles City Express is 1.24 times less risky than NIKE. It trades about -0.02 of its potential returns per unit of risk. NIKE Inc is currently generating about -0.11 per unit of risk. If you would invest 446.00 in Hoteles City Express on December 29, 2024 and sell it today you would lose (16.00) from holding Hoteles City Express or give up 3.59% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Hoteles City Express vs. NIKE Inc
Performance |
Timeline |
Hoteles City Express |
NIKE Inc |
Hoteles City and NIKE Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Hoteles City and NIKE
The main advantage of trading using opposite Hoteles City and NIKE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hoteles City 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.Hoteles City vs. Controladora Vuela Compaa | Hoteles City vs. Alsea SAB de | Hoteles City vs. Nemak S A | Hoteles City vs. Grupo Comercial Chedraui |
NIKE vs. Ameriprise Financial | NIKE vs. Air Transport Services | NIKE vs. Martin Marietta Materials | NIKE vs. Grupo Industrial Saltillo |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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