Correlation Between Nike and Altice

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

By analyzing existing cross correlation between Nike Inc and Altice France 8125, you can compare the effects of market volatilities on Nike and Altice 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 Altice. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nike and Altice.

Diversification Opportunities for Nike and Altice

0.01

Correlation Coefficient

Nike  Altice

Significant diversification

The 3 months correlation between Nike and Altice is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Nike Inc and Altice France 8125 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altice France 8125 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 Altice. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altice France 8125 has no effect on the direction of Nike i.e., Nike and Altice go up and down completely randomly.

Pair Corralation between Nike and Altice

Considering the 90-day investment horizon Nike Inc is expected to under-perform the Altice. In addition to that, Nike is 1.28 times more volatile than Altice France 8125. It trades about -0.11 of its total potential returns per unit of risk. Altice France 8125 is currently generating about 0.03 per unit of volatility. If you would invest  8,104  in Altice France 8125 on December 30, 2024 and sell it today you would earn a total of  132.00  from holding Altice France 8125 or generate 1.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	90.32%
Values	Daily Returns

Nike Inc  vs.  Altice France 8125

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 conflicting performance in the last few months, the Stock's forward-looking signals remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Altice France 8125

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Altice France 8125 are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Altice is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Nike and Altice

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

The idea behind Nike Inc and Altice France 8125 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.