Correlation Between Vista Outdoor and Nike
Can any of the company-specific risk be diversified away by investing in both Vista Outdoor 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 Vista Outdoor and Nike into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vista Outdoor and Nike Inc, you can compare the effects of market volatilities on Vista Outdoor 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 Vista Outdoor with a short position of Nike. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vista Outdoor and Nike.
Diversification Opportunities for Vista Outdoor and Nike
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Vista and Nike is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Vista Outdoor and Nike Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nike Inc and Vista Outdoor 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 Vista Outdoor 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 Vista Outdoor i.e., Vista Outdoor and Nike go up and down completely randomly.
Pair Corralation between Vista Outdoor and Nike
Given the investment horizon of 90 days Vista Outdoor is expected to generate 1.2 times more return on investment than Nike. However, Vista Outdoor is 1.2 times more volatile than Nike Inc. It trades about 0.15 of its potential returns per unit of risk. Nike Inc is currently generating about 0.13 per unit of risk. If you would invest 3,362 in Vista Outdoor on February 7, 2024 and sell it today you would earn a total of 175.00 from holding Vista Outdoor or generate 5.21% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Vista Outdoor vs. Nike Inc
Performance |
Timeline |
Vista Outdoor |
Nike Inc |
Vista Outdoor and Nike Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Vista Outdoor and Nike
The main advantage of trading using opposite Vista Outdoor and Nike positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vista Outdoor 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.Vista Outdoor vs. Planet Fitness | Vista Outdoor vs. Funko Inc | Vista Outdoor vs. Cedar Fair LP | Vista Outdoor vs. OneSpaWorld Holdings |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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