Correlation Between Nike and BANK HANDLOWY

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Nike and BANK HANDLOWY 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 BANK HANDLOWY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nike Inc and BANK HANDLOWY, you can compare the effects of market volatilities on Nike and BANK HANDLOWY 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 BANK HANDLOWY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nike and BANK HANDLOWY.

Diversification Opportunities for Nike and BANK HANDLOWY

NikeBANKDiversified AwayNikeBANKDiversified Away100%
0.29
  Correlation Coefficient

Modest diversification

The 3 months correlation between Nike and BANK is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Nike Inc and BANK HANDLOWY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BANK HANDLOWY 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 BANK HANDLOWY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BANK HANDLOWY has no effect on the direction of Nike i.e., Nike and BANK HANDLOWY go up and down completely randomly.

Pair Corralation between Nike and BANK HANDLOWY

Assuming the 90 days trading horizon Nike Inc is expected to generate 2.29 times more return on investment than BANK HANDLOWY. However, Nike is 2.29 times more volatile than BANK HANDLOWY. It trades about 0.03 of its potential returns per unit of risk. BANK HANDLOWY is currently generating about 0.0 per unit of risk. If you would invest  7,241  in Nike Inc on September 18, 2024 and sell it today you would earn a total of  192.00  from holding Nike Inc or generate 2.65% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy98.46%
ValuesDaily Returns

Nike Inc  vs.  BANK HANDLOWY

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec -50510
JavaScript chart by amCharts 3.21.15NKE 6HW
       Timeline  
Nike Inc 

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Nike Inc are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical and fundamental indicators, Nike is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec707274767880
BANK HANDLOWY 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days BANK HANDLOWY has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, BANK HANDLOWY is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec20.420.620.82121.221.421.621.8

Nike and BANK HANDLOWY Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-5.21-3.9-2.59-1.290.01.272.613.955.296.63 0.10.20.30.40.50.60.7
JavaScript chart by amCharts 3.21.15NKE 6HW
       Returns  

Pair Trading with Nike and BANK HANDLOWY

The main advantage of trading using opposite Nike and BANK HANDLOWY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nike position performs unexpectedly, BANK HANDLOWY 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 BANK HANDLOWY will offset losses from the drop in BANK HANDLOWY's long position.
The idea behind Nike Inc and BANK HANDLOWY 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.

Other Complementary Tools

Bonds Directory
Find actively traded corporate debentures issued by US companies
Portfolio Holdings
Check your current holdings and cash postion to detemine if your portfolio needs rebalancing
Portfolio Volatility
Check portfolio volatility and analyze historical return density to properly model market risk
Idea Optimizer
Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio
Economic Indicators
Top statistical indicators that provide insights into how an economy is performing