Correlation Between NIKE and Autopistas Del

Can any of the company-specific risk be diversified away by investing in both NIKE and Autopistas Del 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 NIKE and Autopistas Del into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between NIKE Inc and Autopistas del Sol, you can compare the effects of market volatilities on NIKE and Autopistas Del 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 NIKE with a short position of Autopistas Del. Check out your portfolio center. Please also check ongoing floating volatility patterns of NIKE and Autopistas Del.

Diversification Opportunities for NIKE and Autopistas Del

-0.59

Correlation Coefficient

NIKE  Autopistas Del

Excellent diversification

The 3 months correlation between NIKE and Autopistas is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding NIKE Inc and Autopistas del Sol in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Autopistas del Sol and NIKE 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 NIKE Inc are associated (or correlated) with Autopistas Del. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Autopistas del Sol has no effect on the direction of NIKE i.e., NIKE and Autopistas Del go up and down completely randomly.

Pair Corralation between NIKE and Autopistas Del

Assuming the 90 days trading horizon NIKE is expected to generate 1.51 times less return on investment than Autopistas Del. But when comparing it to its historical volatility, NIKE Inc is 1.71 times less risky than Autopistas Del. It trades about 0.03 of its potential returns per unit of risk. Autopistas del Sol is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  346,500  in Autopistas del Sol on October 22, 2024 and sell it today you would earn a total of  6,000  from holding Autopistas del Sol or generate 1.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

NIKE Inc  vs.  Autopistas del Sol

NIKE Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NIKE Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical and fundamental indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Autopistas del Sol

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Autopistas del Sol are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Autopistas Del sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with NIKE and Autopistas Del

The main advantage of trading using opposite NIKE and Autopistas Del positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NIKE position performs unexpectedly, Autopistas Del 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 Autopistas Del will offset losses from the drop in Autopistas Del's long position.

The idea behind NIKE Inc and Autopistas del Sol 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.

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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.