Correlation Between Madison Square and Nautilus

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

By analyzing existing cross correlation between Madison Square Garden and Nautilus Group, you can compare the effects of market volatilities on Madison Square and Nautilus 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 Madison Square with a short position of Nautilus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Madison Square and Nautilus.

Diversification Opportunities for Madison Square and Nautilus

0.68

Correlation Coefficient

Madison Square  Nautilus

Poor diversification

The 3 months correlation between Madison and Nautilus is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Madison Square Garden and Nautilus Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nautilus Group and Madison Square 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 Madison Square Garden are associated (or correlated) with Nautilus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nautilus Group has no effect on the direction of Madison Square i.e., Madison Square and Nautilus go up and down completely randomly.

Pair Corralation between Madison Square and Nautilus

If you would invest  106.00  in Nautilus Group on September 13, 2024 and sell it today you would earn a total of  0.00  from holding Nautilus Group or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	1.59%
Values	Daily Returns

Madison Square Garden  vs.  Nautilus Group

Madison Square Garden

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Madison Square Garden has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Nautilus Group

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Madison Square and Nautilus

The main advantage of trading using opposite Madison Square and Nautilus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Madison Square position performs unexpectedly, Nautilus 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 Nautilus will offset losses from the drop in Nautilus' long position.

The idea behind Madison Square Garden and Nautilus Group 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..