Correlation Between Bushveld Minerals and Nike

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

Diversification Opportunities for Bushveld Minerals and Nike

-0.26
  Correlation Coefficient

Very good diversification

The 3 months correlation between Bushveld and Nike is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Bushveld Minerals Limited and Nike Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nike Inc and Bushveld Minerals 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 Bushveld Minerals Limited 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 Bushveld Minerals i.e., Bushveld Minerals and Nike go up and down completely randomly.

Pair Corralation between Bushveld Minerals and Nike

Assuming the 90 days horizon Bushveld Minerals Limited is expected to generate 10.1 times more return on investment than Nike. However, Bushveld Minerals is 10.1 times more volatile than Nike Inc. It trades about 0.09 of its potential returns per unit of risk. Nike Inc is currently generating about -0.05 per unit of risk. If you would invest  12.00  in Bushveld Minerals Limited on September 5, 2022 and sell it today you would lose (5.00)  from holding Bushveld Minerals Limited or give up 41.67% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy99.6%
ValuesDaily Returns

Bushveld Minerals Limited  vs.  Nike Inc

 Performance (%) 
       Timeline  
Bushveld Minerals 
Bushveld Performance
7 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Bushveld Minerals Limited are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Bushveld Minerals exhibited solid returns over the last few months and may actually be approaching a breakup point.

Bushveld Price Channel

Nike Inc 
Nike Performance
3 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Nike Inc are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak forward-looking signals, Nike may actually be approaching a critical reversion point that can send shares even higher in January 2023.

Nike Price Channel

Bushveld Minerals and Nike Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Bushveld Minerals and Nike

The main advantage of trading using opposite Bushveld Minerals and Nike positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bushveld Minerals 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.
Bushveld Minerals vs. Alcoa Corp
Bushveld Minerals vs. Dupont De Nemours
Bushveld Minerals vs. Linde PLC
Bushveld Minerals vs. Anheuser Busch Inbev
The idea behind Bushveld Minerals Limited 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.
Nike vs. Brunswick
Nike vs. Topbuild Corp
Nike vs. Beazer Homes USA
Nike vs. Century Communities
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.

Other Complementary Tools

Efficient Frontier
Plot and analyze your portfolio and positions against risk-return landscape of the market.
Go
Money Flow Index
Determine momentum by analyzing Money Flow Index and other technical indicators
Go
Focused Opportunities
Build portfolios using our predefined set of ideas and optimize them against your investing preferences
Go
Portfolio Comparator
Compare the composition, asset allocations and performance of any two portfolios in your account
Go
Probability Of Bankruptcy
Get analysis of equity chance of financial distress in the next 2 years
Go
Portfolio Suggestion
Get suggestions outside of your existing asset allocation including your own model portfolios
Go
Probability Of Bankruptcy
Get analysis of equity chance of financial distress in the next 2 years
Go
Bond Directory
Find actively traded corporate debentures issued by US companies
Go
CEO Directory
Screen CEOs from public companies around the world
Go
Equity Valuation
Check real value of public entities based on technical and fundamental data
Go
Bond Analysis
Evaluate and analyze corporate bonds as a potential investment for your portfolios.
Go
Portfolio Diagnostics
Use generated alerts and portfolio events aggregator to diagnose current holdings
Go
Probability Of Bankruptcy
Get analysis of equity chance of financial distress in the next 2 years
Go