Correlation Between Shimano and American Outdoor

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Shimano and American 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 American Outdoor 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 American Outdoor Brands, you can compare the effects of market volatilities on Shimano and American 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 American Outdoor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shimano and American Outdoor.

Diversification Opportunities for Shimano and American Outdoor

ShimanoAmericanDiversified AwayShimanoAmericanDiversified Away100%
-0.16
  Correlation Coefficient

Good diversification

The 3 months correlation between Shimano and American is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Shimano Inc ADR and American Outdoor Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Outdoor Brands 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 American Outdoor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Outdoor Brands has no effect on the direction of Shimano i.e., Shimano and American Outdoor go up and down completely randomly.

Pair Corralation between Shimano and American Outdoor

Assuming the 90 days horizon Shimano Inc ADR is expected to under-perform the American Outdoor. But the pink sheet apears to be less risky and, when comparing its historical volatility, Shimano Inc ADR is 1.55 times less risky than American Outdoor. The pink sheet trades about -0.02 of its potential returns per unit of risk. The American Outdoor Brands is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  946.00  in American Outdoor Brands on November 27, 2024 and sell it today you would earn a total of  636.00  from holding American Outdoor Brands or generate 67.23% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Shimano Inc ADR  vs.  American Outdoor Brands

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb 020406080100
JavaScript chart by amCharts 3.21.15SMNNY AOUT
       Timeline  
Shimano Inc ADR 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
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 fairly strong basic indicators, Shimano is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb12.51313.51414.5
American Outdoor Brands 

Risk-Adjusted Performance

Solid

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in American Outdoor Brands are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, American Outdoor unveiled solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb101112131415161718

Shimano and American Outdoor Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-2.41-1.81-1.2-0.60.00.61.21.812.41 0.050.100.15
JavaScript chart by amCharts 3.21.15SMNNY AOUT
       Returns  

Pair Trading with Shimano and American Outdoor

The main advantage of trading using opposite Shimano and American Outdoor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shimano position performs unexpectedly, American 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 American Outdoor will offset losses from the drop in American Outdoor's long position.
The idea behind Shimano Inc ADR and American Outdoor Brands 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.

Other Complementary Tools

CEOs Directory
Screen CEOs from public companies around the world
Portfolio Suggestion
Get suggestions outside of your existing asset allocation including your own model portfolios
Portfolio Dashboard
Portfolio dashboard that provides centralized access to all your investments
Aroon Oscillator
Analyze current equity momentum using Aroon Oscillator and other momentum ratios
Earnings Calls
Check upcoming earnings announcements updated hourly across public exchanges


 

Trending Assets

NULL
Nedbank Group Limited
0.00  0.00  0.00 
TIG
Tigere Real Estate
114.95  0.09  0.08 
ZBFH
ZB FINANCIAL HOLDINGS
451.00  -18.9  -4.02 
WILD
WILLDALE LIMITED
2.40  0.26  12.15 
RIOZ
RIO ZIM LIMITED
106.90  0.00  0.00 
SACL
STAR AFRICA PORATION
2.86  -0.14  -4.67 
CAFCA
CAFCA LIMITED
1,800  -25  -1.37 
DMCS
Datvest Modified Consumer
3.00  0.00  0.00 
EHZL
ECOCASH HOLDINGS ZIMBABWE
14.09  -1.4  -9.04