Correlation Between Renewable Energy and Nike

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

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

Diversification Opportunities for Renewable Energy and Nike

0.0

Correlation Coefficient

Renewable Energy  Nike

Pay attention - limited upside

The 3 months correlation between Renewable and Nike is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Renewable Energy and and Nike Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nike Inc and Renewable Energy 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 Renewable Energy and 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 Renewable Energy i.e., Renewable Energy and Nike go up and down completely randomly.

Pair Corralation between Renewable Energy and Nike

If you would invest  7,833  in Nike Inc on December 1, 2024 and sell it today you would earn a total of  169.00  from holding Nike Inc or generate 2.16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Renewable Energy and  vs.  Nike Inc

Renewable Energy

Risk-Adjusted Performance

Very Weak

Over the last 90 days Renewable Energy and has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Renewable Energy is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Nike Inc

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Nike Inc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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.

Pair Trading with Renewable Energy and Nike

The main advantage of trading using opposite Renewable Energy and Nike positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Renewable Energy 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 Renewable Energy and 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.

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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.