Correlation Between YETI Holdings and Nikon

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

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

Diversification Opportunities for YETI Holdings and Nikon

0.0

Correlation Coefficient

YETI Holdings  Nikon

Pay attention - limited upside

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

Pair Corralation between YETI Holdings and Nikon

If you would invest (100.00) in Nikon on December 21, 2024 and sell it today you would earn a total of  100.00  from holding Nikon 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

YETI Holdings  vs.  Nikon

YETI Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days YETI Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Nikon

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nikon has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Nikon is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with YETI Holdings and Nikon

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

The idea behind YETI Holdings and Nikon 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.