Correlation Between American Outdoor and Nikon
Can any of the company-specific risk be diversified away by investing in both American Outdoor and Nikon 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 American Outdoor and Nikon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Outdoor Brands and Nikon, you can compare the effects of market volatilities on American Outdoor and Nikon 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 American Outdoor with a short position of Nikon. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Outdoor and Nikon.
Diversification Opportunities for American Outdoor and Nikon
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between American and Nikon is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding American Outdoor Brands and Nikon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nikon and American 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 American Outdoor Brands are associated (or correlated) with Nikon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nikon has no effect on the direction of American Outdoor i.e., American Outdoor and Nikon go up and down completely randomly.
Pair Corralation between American Outdoor and Nikon
If you would invest 989.00 in American Outdoor Brands on December 3, 2024 and sell it today you would earn a total of 590.00 from holding American Outdoor Brands or generate 59.66% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 0.0% |
Values | Daily Returns |
American Outdoor Brands vs. Nikon
Performance |
Timeline |
American Outdoor Brands |
Nikon |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
American Outdoor and Nikon Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with American Outdoor and Nikon
The main advantage of trading using opposite American Outdoor and Nikon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Outdoor position performs unexpectedly, Nikon 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 Nikon will offset losses from the drop in Nikon's long position.American Outdoor vs. Clarus Corp | American Outdoor vs. Escalade Incorporated | American Outdoor vs. Johnson Outdoors | American Outdoor vs. JAKKS Pacific |
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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