Correlation Between METTLER TOLEDO and Nike

Can any of the company-specific risk be diversified away by investing in both METTLER TOLEDO 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 METTLER TOLEDO and Nike into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between METTLER TOLEDO INTL and Nike Inc, you can compare the effects of market volatilities on METTLER TOLEDO 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 METTLER TOLEDO with a short position of Nike. Check out your portfolio center. Please also check ongoing floating volatility patterns of METTLER TOLEDO and Nike.

Diversification Opportunities for METTLER TOLEDO and Nike

0.0

Correlation Coefficient

METTLER TOLEDO  Nike

Pay attention - limited upside

The 3 months correlation between METTLER and Nike is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding METTLER TOLEDO INTL and Nike Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nike Inc and METTLER TOLEDO 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 METTLER TOLEDO INTL 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 METTLER TOLEDO i.e., METTLER TOLEDO and Nike go up and down completely randomly.

Pair Corralation between METTLER TOLEDO and Nike

If you would invest (100.00) in METTLER TOLEDO INTL on February 18, 2024 and sell it today you would earn a total of  100.00  from holding METTLER TOLEDO INTL or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

METTLER TOLEDO INTL  vs.  Nike Inc

METTLER TOLEDO INTL

Risk-Adjusted Performance

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Good

Over the last 90 days METTLER TOLEDO INTL has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, METTLER TOLEDO is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Nike Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nike Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with METTLER TOLEDO and Nike

The main advantage of trading using opposite METTLER TOLEDO and Nike positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if METTLER TOLEDO 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.

The idea behind METTLER TOLEDO INTL 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.

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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.