Correlation Between Nike and Aimfinity Investment

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

By analyzing existing cross correlation between Nike Inc and Aimfinity Investment I, you can compare the effects of market volatilities on Nike and Aimfinity Investment 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 Aimfinity Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nike and Aimfinity Investment.

Diversification Opportunities for Nike and Aimfinity Investment

-0.44

Correlation Coefficient

Nike  Aimfinity Investment

Very good diversification

The 3 months correlation between Nike and Aimfinity is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Nike Inc and Aimfinity Investment I in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aimfinity Investment 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 Aimfinity Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aimfinity Investment has no effect on the direction of Nike i.e., Nike and Aimfinity Investment go up and down completely randomly.

Pair Corralation between Nike and Aimfinity Investment

Considering the 90-day investment horizon Nike is expected to generate 14.88 times less return on investment than Aimfinity Investment. But when comparing it to its historical volatility, Nike Inc is 1.26 times less risky than Aimfinity Investment. It trades about 0.0 of its potential returns per unit of risk. Aimfinity Investment I is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  1,190  in Aimfinity Investment I on December 4, 2024 and sell it today you would earn a total of  14.00  from holding Aimfinity Investment I or generate 1.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.33%
Values	Daily Returns

Nike Inc  vs.  Aimfinity Investment I

Nike Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nike Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound forward-looking signals, Nike is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Aimfinity Investment

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Aimfinity Investment I are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Aimfinity Investment is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Nike and Aimfinity Investment

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

The idea behind Nike Inc and Aimfinity Investment I 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.