Correlation Between Shimano and Nautilus

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

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

Diversification Opportunities for Shimano and Nautilus

0.54

Correlation Coefficient

Shimano  Nautilus

Very weak diversification

The 3 months correlation between Shimano and Nautilus is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Shimano Inc ADR and Nautilus Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nautilus Group and Shimano 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 Shimano Inc ADR 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 Shimano i.e., Shimano and Nautilus go up and down completely randomly.

Pair Corralation between Shimano and Nautilus

If you would invest  106.00  in Nautilus Group on September 4, 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	Weak
Accuracy	1.56%
Values	Daily Returns

Shimano Inc ADR  vs.  Nautilus Group

Shimano Inc ADR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Shimano Inc ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company 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 Shimano and Nautilus

The main advantage of trading using opposite Shimano and Nautilus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shimano 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 Shimano Inc ADR 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.