Correlation Between NIKE and Partners Value

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both NIKE and Partners Value 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 Partners Value into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NIKE Inc CDR and Partners Value Investments, you can compare the effects of market volatilities on NIKE and Partners Value 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 Partners Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of NIKE and Partners Value.

Diversification Opportunities for NIKE and Partners Value

-0.55
  Correlation Coefficient

Excellent diversification

The 3 months correlation between NIKE and Partners is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding NIKE Inc CDR and Partners Value Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Partners Value Inves 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 CDR are associated (or correlated) with Partners Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Partners Value Inves has no effect on the direction of NIKE i.e., NIKE and Partners Value go up and down completely randomly.

Pair Corralation between NIKE and Partners Value

Assuming the 90 days trading horizon NIKE is expected to generate 5.29 times less return on investment than Partners Value. But when comparing it to its historical volatility, NIKE Inc CDR is 1.24 times less risky than Partners Value. It trades about 0.14 of its potential returns per unit of risk. Partners Value Investments is currently generating about 0.61 of returns per unit of risk over similar time horizon. If you would invest  12,999  in Partners Value Investments on September 19, 2024 and sell it today you would earn a total of  3,501  from holding Partners Value Investments or generate 26.93% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

NIKE Inc CDR  vs.  Partners Value Investments

 Performance 
       Timeline  
NIKE Inc CDR 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days NIKE Inc CDR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, NIKE is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.
Partners Value Inves 

Risk-Adjusted Performance

16 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Partners Value Investments are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating basic indicators, Partners Value sustained solid returns over the last few months and may actually be approaching a breakup point.

NIKE and Partners Value Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with NIKE and Partners Value

The main advantage of trading using opposite NIKE and Partners Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NIKE position performs unexpectedly, Partners Value 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 Partners Value will offset losses from the drop in Partners Value's long position.
The idea behind NIKE Inc CDR and Partners Value Investments 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.

Other Complementary Tools

Crypto Correlations
Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins
Fundamentals Comparison
Compare fundamentals across multiple equities to find investing opportunities
Commodity Directory
Find actively traded commodities issued by global exchanges
Portfolio Volatility
Check portfolio volatility and analyze historical return density to properly model market risk
Share Portfolio
Track or share privately all of your investments from the convenience of any device