Correlation Between Nautilus and SeaWorld Entertainment

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

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

Diversification Opportunities for Nautilus and SeaWorld Entertainment

0.0

Correlation Coefficient

Nautilus  SeaWorld Entertainment

Pay attention - limited upside

The 3 months correlation between Nautilus and SeaWorld is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Nautilus Group and SeaWorld Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SeaWorld Entertainment 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 SeaWorld Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SeaWorld Entertainment has no effect on the direction of Nautilus i.e., Nautilus and SeaWorld Entertainment go up and down completely randomly.

Pair Corralation between Nautilus and SeaWorld Entertainment

If you would invest (100.00) in SeaWorld Entertainment on December 20, 2024 and sell it today you would earn a total of  100.00  from holding SeaWorld Entertainment or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Nautilus Group  vs.  SeaWorld Entertainment

Nautilus Group

Risk-Adjusted Performance

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.

SeaWorld Entertainment

Risk-Adjusted Performance

Very Weak

Over the last 90 days SeaWorld Entertainment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, SeaWorld Entertainment 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 Nautilus and SeaWorld Entertainment

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

The idea behind Nautilus Group and SeaWorld Entertainment 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.

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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.