Correlation Between Shimano and Nikon
Can any of the company-specific risk be diversified away by investing in both Shimano 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 Shimano and Nikon 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 Nikon, you can compare the effects of market volatilities on Shimano 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 Shimano with a short position of Nikon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shimano and Nikon.
Diversification Opportunities for Shimano and Nikon
Good diversification
The 3 months correlation between Shimano and Nikon is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Shimano Inc ADR and Nikon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nikon 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 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 Shimano i.e., Shimano and Nikon go up and down completely randomly.
Pair Corralation between Shimano and Nikon
Assuming the 90 days horizon Shimano Inc ADR is expected to generate 0.3 times more return on investment than Nikon. However, Shimano Inc ADR is 3.32 times less risky than Nikon. It trades about -0.02 of its potential returns per unit of risk. Nikon is currently generating about -0.06 per unit of risk. If you would invest 1,662 in Shimano Inc ADR on August 31, 2024 and sell it today you would lose (275.00) from holding Shimano Inc ADR or give up 16.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 9.36% |
| Values | Daily Returns |
Shimano Inc ADR vs. Nikon
Performance |
| Timeline |
| Shimano Inc ADR |
| Nikon |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Shimano and Nikon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shimano and Nikon
The main advantage of trading using opposite Shimano and Nikon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shimano 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.| Shimano vs. Callaway Golf | Shimano vs. Peloton Interactive | Shimano vs. BANDAI NAMCO Holdings | Shimano vs. Nikon Corp |
| Nikon vs. Yamaha Corp DRC | Nikon vs. Shimano Inc ADR | Nikon vs. Plby Group | Nikon vs. BANDAI NAMCO Holdings |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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