Correlation Between FIBRA Storage and NIKE

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

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

Diversification Opportunities for FIBRA Storage and NIKE

-0.4

Correlation Coefficient

FIBRA Storage  NIKE

Very good diversification

The 3 months correlation between FIBRA and NIKE is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding FIBRA Storage and NIKE Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NIKE Inc and FIBRA Storage 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 FIBRA Storage 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 FIBRA Storage i.e., FIBRA Storage and NIKE go up and down completely randomly.

Pair Corralation between FIBRA Storage and NIKE

Assuming the 90 days trading horizon FIBRA Storage is expected to generate 0.52 times more return on investment than NIKE. However, FIBRA Storage is 1.94 times less risky than NIKE. It trades about 0.02 of its potential returns per unit of risk. NIKE Inc is currently generating about -0.03 per unit of risk. If you would invest  1,660  in FIBRA Storage on September 25, 2024 and sell it today you would earn a total of  130.00  from holding FIBRA Storage or generate 7.83% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.6%
Values	Daily Returns

FIBRA Storage  vs.  NIKE Inc

FIBRA Storage

Risk-Adjusted Performance

29 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in FIBRA Storage are ranked lower than 29 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical and fundamental indicators, FIBRA Storage exhibited solid returns over the last few months and may actually be approaching a breakup point.

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 latest weak performance, the Stock's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with FIBRA Storage and NIKE

The main advantage of trading using opposite FIBRA Storage and NIKE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FIBRA Storage 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 FIBRA Storage 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.