Correlation Between Canada Goose and Nike
Can any of the company-specific risk be diversified away by investing in both Canada Goose 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 Canada Goose and Nike into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canada Goose Holdings and Nike Inc, you can compare the effects of market volatilities on Canada Goose 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 Canada Goose with a short position of Nike. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canada Goose and Nike.
Diversification Opportunities for Canada Goose and Nike
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Canada and Nike is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Canada Goose Holdings and Nike Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nike Inc and Canada Goose 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 Canada Goose Holdings 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 Canada Goose i.e., Canada Goose and Nike go up and down completely randomly.
Pair Corralation between Canada Goose and Nike
Given the investment horizon of 90 days Canada Goose Holdings is expected to under-perform the Nike. In addition to that, Canada Goose is 1.52 times more volatile than Nike Inc. It trades about -0.02 of its total potential returns per unit of risk. Nike Inc is currently generating about -0.02 per unit of volatility. If you would invest 8,023 in Nike Inc on September 17, 2024 and sell it today you would lose (298.00) from holding Nike Inc or give up 3.71% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Canada Goose Holdings vs. Nike Inc
Performance |
Timeline |
Canada Goose Holdings |
Nike Inc |
Canada Goose and Nike Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Canada Goose and Nike
The main advantage of trading using opposite Canada Goose and Nike positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canada Goose 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.Canada Goose vs. Digital Brands Group | Canada Goose vs. Data Storage | Canada Goose vs. Auddia Inc | Canada Goose vs. DatChat Series A |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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