Correlation Between Nike and World Point
Can any of the company-specific risk be diversified away by investing in both Nike and World Point 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 World Point into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nike Inc and World Point Terminals, you can compare the effects of market volatilities on Nike and World Point 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 World Point. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nike and World Point.
Diversification Opportunities for Nike and World Point
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Nike and World is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Nike Inc and World Point Terminals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on World Point Terminals 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 World Point. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of World Point Terminals has no effect on the direction of Nike i.e., Nike and World Point go up and down completely randomly.
Pair Corralation between Nike and World Point
If you would invest (100.00) in World Point Terminals on January 20, 2024 and sell it today you would earn a total of 100.00 from holding World Point Terminals or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Nike Inc vs. World Point Terminals
Performance |
| Timeline |
| Nike Inc |
| World Point Terminals |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Nike and World Point Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nike and World Point
The main advantage of trading using opposite Nike and World Point positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nike position performs unexpectedly, World Point 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 World Point will offset losses from the drop in World Point's long position.The idea behind Nike Inc and World Point Terminals 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.| World Point vs. AKITA Drilling | World Point vs. Kura Sushi USA | World Point vs. Dine Brands Global | World Point vs. Superior Drilling Products |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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