| Click cells to compare fundamentals | Check Volatility | Backtest Portfolio |
Breaking down Nike (NYSE:NKE) volatility dip
 | By Ellen Johnson | Macroaxis Story |
It looks as if Nike will continue to recover much faster as its share price surged up 1.56% today. The company's current daily volatility is 1.62 percent, with a beta of 0.4 and an alpha of 0.18 over DOW. As many baby boomers are still indifferent towards corona opportunity, it makes sense to digest Nike Inc. We will look into some reasons why it is still possible for Nike to maintain above-average margins while minimizing volatility.
Macroaxis uses a strict editorial review process to publish stories and blog posts. Our publishers support our company and may receive a small commission when the partner links or references are utilized. Commissions do not affect the opinions or evaluations of our editorial team. The information our editors and media partners deliver is confidential and licensed for your sole use as a Macroaxis user. We reserve all rights to the content of this article, and therefore copying or distributing this story in whole or in part is strictly prohibited.
Reviewed by Vlad Skutelnik
Nike Inc has roughly 9.48 B in cash with 2.97 B of positive cash flow from operations. This results in cash-per-share (CPS) ratio of 6.04. The asset utilization indicator refers to the revenue earned for every dollar of assets a company currently reports. Nike has an asset utilization ratio of 174.66 percent. This indicates that the company is making $1.75 for each dollar of assets. An increasing asset utilization means that Nike Inc is more efficient with each dollar of assets it utilizes for everyday operations.
Please note, it is not enough to conduct a financial or market analysis of a single entity such as Nike. Your research has to be compared to or analyzed against Nike's peers to derive any actionable benefits. When done correctly, Nike's competitive analysis will give you plenty of quantitative and qualitative data to validate your investment decisions or develop an entirely new strategy toward taking a position in Nike Inc.
Investing in Nike, just like investing in any other equity instrument, is characterized by a strong risk-return correlation. High risks mean high returns and low risk means lower expected returns. Risk management is the act of identifying and assessing the potential risk and developing strategies to minimize these risks and earn maximum possible profits while holding Nike along with other instruments in the same portfolio. Using conventional technical analysis and fundamental analysis to select individual securities into a portfolio complements risk management and adds value to overall investors' investing strategies.
Sophisticated investors, who have witnessed many market ups and downs, anticipate that the market will even out over time. This tendency of Nike's price to converge to an average value over time is called mean reversion. However, historically, high market prices usually discourage investors that believe in mean reversion to invest, while low prices are viewed as an opportunity to buy.
How important is Nike's Liquidity
Nike financial leverage refers to using borrowed capital as a funding source to finance Nike Inc ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Nike financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Financial leverage can amplify the potential profits to Nike's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of Nike's financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets). Please check the breakdown between Nike's total debt and its cash.
Nike Gross Profit
Nike Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing Nike previous period's values with its current period's values. Each time period you're measuring should be of equal lengths the increase or decrease, in a company's Gross Profit between two periods. Here we show Nike Gross Profit growth over the last 10 years. Please check Nike's gross profit and other fundamental indicators for more details.
Nike Correlation with Peers
Investors in Nike can reduce exposure to individual asset risk by holding a diversified portfolio of assets in addition to a long position in Nike Inc. Diversification will allow for the same portfolio return with reduced risk. The correlation table of Nike and its peers is a two-dimensional matrix that shows the correlation coefficient between pairs of securities Nike is related in some way. The cells in the table are color-coded to highlight significantly positive and negative relationships. Each cell shows the correlation between one pair of equities and can be used to run pair trading strategies or create efficient portfolios with your current brokerage. Please check volatility of Nike for more details
A Deeper Perspective On Nike
Nike appears to be very steady, given 1 month investment horizon. Nike Inc has Sharpe Ratio of 0.22, which conveys that the firm had 0.22% of return per unit of risk over the last month. Our standpoint towards estimating the volatility of a stock is to use all available market data together with stock specific technical indicators that cannot be diversified away. We have found twenty-seven technical indicators for Nike, which you can use to evaluate future volatility of the firm. Please exercise Nike Inc Risk Adjusted Performance of 0.1671, mean deviation of 1.07, and Downside Deviation of 1.29 to check out if our risk estimates are consistent with your expectations.
Building efficient market-beating portfolios requires time, education, and a lot of computing power!
The Portfolio Architect is an AI-driven system that provides multiple benefits to our users by leveraging cutting-edge machine learning algorithms, statistical analysis, and predictive modeling to automate the process of asset selection and portfolio construction, saving time and reducing human error for individual and institutional investors.
Try AI Portfolio ArchitectEditorial Staff
This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Ellen Johnson do not own shares of Nike Inc. Please refer to our Terms of Use for any information regarding our disclosure principles.