Correlation Between Nautilus and Nikon Corp

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

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

Diversification Opportunities for Nautilus and Nikon Corp

0.54

Correlation Coefficient

Nautilus  Nikon Corp

Very weak diversification

The 3 months correlation between Nautilus and Nikon is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Nautilus Group and Nikon Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nikon Corp and Nautilus 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 Nautilus Group are associated (or correlated) with Nikon Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nikon Corp has no effect on the direction of Nautilus i.e., Nautilus and Nikon Corp go up and down completely randomly.

Pair Corralation between Nautilus and Nikon Corp

If you would invest  1,031  in Nikon Corp on October 20, 2024 and sell it today you would lose (4.00) from holding Nikon Corp or give up 0.39% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	5.0%
Values	Daily Returns

Nautilus Group  vs.  Nikon Corp

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.

Nikon Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nikon Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Nautilus and Nikon Corp

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

The idea behind Nautilus Group and Nikon Corp 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.