Correlation Between NIKE and Grupo Concesionario

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

By analyzing existing cross correlation between NIKE Inc and Grupo Concesionario del, you can compare the effects of market volatilities on NIKE and Grupo Concesionario 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 Grupo Concesionario. Check out your portfolio center. Please also check ongoing floating volatility patterns of NIKE and Grupo Concesionario.

Diversification Opportunities for NIKE and Grupo Concesionario

-0.6

Correlation Coefficient

NIKE  Grupo Concesionario

Excellent diversification

The 3 months correlation between NIKE and Grupo is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding NIKE Inc and Grupo Concesionario del in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Concesionario del 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 Grupo Concesionario. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Concesionario del has no effect on the direction of NIKE i.e., NIKE and Grupo Concesionario go up and down completely randomly.

Pair Corralation between NIKE and Grupo Concesionario

Assuming the 90 days trading horizon NIKE Inc is expected to generate 0.6 times more return on investment than Grupo Concesionario. However, NIKE Inc is 1.67 times less risky than Grupo Concesionario. It trades about -0.2 of its potential returns per unit of risk. Grupo Concesionario del is currently generating about -0.14 per unit of risk. If you would invest  742,000  in NIKE Inc on October 20, 2024 and sell it today you would lose (36,000) from holding NIKE Inc or give up 4.85% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.0%
Values	Daily Returns

NIKE Inc  vs.  Grupo Concesionario del

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.

Grupo Concesionario del

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Grupo Concesionario del are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Grupo Concesionario is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with NIKE and Grupo Concesionario

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

The idea behind NIKE Inc and Grupo Concesionario del 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.