Correlation Between Nike and 254687DB9

Can any of the company-specific risk be diversified away by investing in both Nike and 254687DB9 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 254687DB9 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Nike Inc and DIS 85 23 FEB 25, you can compare the effects of market volatilities on Nike and 254687DB9 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 254687DB9. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nike and 254687DB9.

Diversification Opportunities for Nike and 254687DB9

-0.41

Correlation Coefficient

Nike  254687DB9

Very good diversification

The 3 months correlation between Nike and 254687DB9 is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Nike Inc and DIS 85 23 FEB 25 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DIS 85 23 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 254687DB9. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DIS 85 23 has no effect on the direction of Nike i.e., Nike and 254687DB9 go up and down completely randomly.

Pair Corralation between Nike and 254687DB9

Considering the 90-day investment horizon Nike Inc is expected to under-perform the 254687DB9. In addition to that, Nike is 1.95 times more volatile than DIS 85 23 FEB 25. It trades about -0.07 of its total potential returns per unit of risk. DIS 85 23 FEB 25 is currently generating about 0.01 per unit of volatility. If you would invest  10,310  in DIS 85 23 FEB 25 on October 22, 2024 and sell it today you would earn a total of  41.00  from holding DIS 85 23 FEB 25 or generate 0.4% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	85.09%
Values	Daily Returns

Nike Inc  vs.  DIS 85 23 FEB 25

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. 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 February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

DIS 85 23

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in DIS 85 23 FEB 25 are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, 254687DB9 is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Nike and 254687DB9

The main advantage of trading using opposite Nike and 254687DB9 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nike position performs unexpectedly, 254687DB9 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 254687DB9 will offset losses from the drop in 254687DB9's long position.

The idea behind Nike Inc and DIS 85 23 FEB 25 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.