Correlation Between Six Flags and Nautilus

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

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

Diversification Opportunities for Six Flags and Nautilus

-0.58

Correlation Coefficient

Six Flags  Nautilus

Excellent diversification

The 3 months correlation between Six and Nautilus is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Six Flags Entertainment and Nautilus Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nautilus Group and Six Flags 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 Six Flags Entertainment 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 Six Flags i.e., Six Flags and Nautilus go up and down completely randomly.

Pair Corralation between Six Flags and Nautilus

Considering the 90-day investment horizon Six Flags Entertainment is expected to generate 0.8 times more return on investment than Nautilus. However, Six Flags Entertainment is 1.25 times less risky than Nautilus. It trades about 0.04 of its potential returns per unit of risk. Nautilus Group is currently generating about -0.1 per unit of risk. If you would invest  2,518  in Six Flags Entertainment on September 4, 2024 and sell it today you would earn a total of  682.00  from holding Six Flags Entertainment or generate 27.08% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	35.6%
Values	Daily Returns

Six Flags Entertainment  vs.  Nautilus Group

Six Flags Entertainment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Six Flags Entertainment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong forward indicators, Six Flags is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

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 Six Flags and Nautilus

The main advantage of trading using opposite Six Flags and Nautilus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Six Flags 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 Six Flags Entertainment 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.