Correlation Between NetSol Technologies and Nike

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

By analyzing existing cross correlation between NetSol Technologies and Nike Inc, you can compare the effects of market volatilities on NetSol Technologies and Nike 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 NetSol Technologies with a short position of Nike. Check out your portfolio center. Please also check ongoing floating volatility patterns of NetSol Technologies and Nike.

Diversification Opportunities for NetSol Technologies and Nike

0.0

Correlation Coefficient

NetSol Technologies  Nike

Pay attention - limited upside

The 3 months correlation between NetSol and Nike is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding NetSol Technologies and Nike Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nike Inc and NetSol Technologies 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 NetSol Technologies are associated (or correlated) with Nike. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nike Inc has no effect on the direction of NetSol Technologies i.e., NetSol Technologies and Nike go up and down completely randomly.

Pair Corralation between NetSol Technologies and Nike

Assuming the 90 days trading horizon NetSol Technologies is expected to generate 1.07 times more return on investment than Nike. However, NetSol Technologies is 1.07 times more volatile than Nike Inc. It trades about -0.1 of its potential returns per unit of risk. Nike Inc is currently generating about -0.12 per unit of risk. If you would invest  250.00  in NetSol Technologies on December 23, 2024 and sell it today you would lose (34.00) from holding NetSol Technologies or give up 13.6% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

NetSol Technologies  vs.  Nike Inc

NetSol Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days NetSol Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

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 fragile performance in the last few months, the Stock's technical and fundamental indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with NetSol Technologies and Nike

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

The idea behind NetSol Technologies and Nike Inc 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.