Correlation Between Shimano and Vista Outdoor
Can any of the company-specific risk be diversified away by investing in both Shimano and Vista Outdoor 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 Vista Outdoor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shimano and Vista Outdoor, you can compare the effects of market volatilities on Shimano and Vista Outdoor 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 Vista Outdoor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shimano and Vista Outdoor.
Diversification Opportunities for Shimano and Vista Outdoor
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Shimano and Vista is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Shimano and Vista Outdoor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vista Outdoor 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 are associated (or correlated) with Vista Outdoor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vista Outdoor has no effect on the direction of Shimano i.e., Shimano and Vista Outdoor go up and down completely randomly.
Pair Corralation between Shimano and Vista Outdoor
Assuming the 90 days horizon Shimano is expected to under-perform the Vista Outdoor. In addition to that, Shimano is 1.64 times more volatile than Vista Outdoor. It trades about -0.04 of its total potential returns per unit of risk. Vista Outdoor is currently generating about 0.13 per unit of volatility. If you would invest 3,390 in Vista Outdoor on August 24, 2024 and sell it today you would earn a total of 1,035 from holding Vista Outdoor or generate 30.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.2% |
| Values | Daily Returns |
Shimano vs. Vista Outdoor
Performance |
| Timeline |
| Shimano |
| Vista Outdoor |
Shimano and Vista Outdoor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shimano and Vista Outdoor
The main advantage of trading using opposite Shimano and Vista Outdoor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shimano position performs unexpectedly, Vista Outdoor 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 Vista Outdoor will offset losses from the drop in Vista Outdoor's long position.| Shimano vs. Small Cap Core | Shimano vs. Freedom Holding Corp | Shimano vs. Gfl Environmental Holdings | Shimano vs. Growth Fund Of |
| Vista Outdoor vs. Clarus Corp | Vista Outdoor vs. Johnson Outdoors | Vista Outdoor vs. Escalade Incorporated | Vista Outdoor vs. JAKKS Pacific |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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