Correlation Between KBS Fashion and Nike

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

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

Diversification Opportunities for KBS Fashion and Nike

0.0

Correlation Coefficient

KBS Fashion  Nike

Pay attention - limited upside

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

Pair Corralation between KBS Fashion and Nike

If you would invest  9,375  in Nike Inc on January 23, 2024 and sell it today you would earn a total of  44.00  from holding Nike Inc or generate 0.47% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

KBS Fashion Group  vs.  Nike Inc

KBS Fashion Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days KBS Fashion Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, KBS Fashion is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

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 conflicting performance, the Stock's forward-looking signals remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with KBS Fashion and Nike

The main advantage of trading using opposite KBS Fashion and Nike positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KBS Fashion 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 KBS Fashion Group 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.