Correlation Between Acme United and Rocky Brands
Can any of the company-specific risk be diversified away by investing in both Acme United and Rocky Brands 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 Acme United and Rocky Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Acme United and Rocky Brands, you can compare the effects of market volatilities on Acme United and Rocky Brands 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 Acme United with a short position of Rocky Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acme United and Rocky Brands.
Diversification Opportunities for Acme United and Rocky Brands
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Acme and Rocky is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Acme United and Rocky Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rocky Brands and Acme United 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 Acme United are associated (or correlated) with Rocky Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rocky Brands has no effect on the direction of Acme United i.e., Acme United and Rocky Brands go up and down completely randomly.
Pair Corralation between Acme United and Rocky Brands
Considering the 90-day investment horizon Acme United is expected to generate 0.72 times more return on investment than Rocky Brands. However, Acme United is 1.39 times less risky than Rocky Brands. It trades about 0.06 of its potential returns per unit of risk. Rocky Brands is currently generating about 0.03 per unit of risk. If you would invest 2,471 in Acme United on August 31, 2024 and sell it today you would earn a total of 1,980 from holding Acme United or generate 80.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Acme United vs. Rocky Brands
Performance |
| Timeline |
| Acme United |
| Rocky Brands |
Acme United and Rocky Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Acme United and Rocky Brands
The main advantage of trading using opposite Acme United and Rocky Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acme United position performs unexpectedly, Rocky Brands 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 Rocky Brands will offset losses from the drop in Rocky Brands' long position.| Acme United vs. Mannatech Incorporated | Acme United vs. European Wax Center | Acme United vs. Inter Parfums | Acme United vs. Spectrum Brands Holdings |
| Rocky Brands vs. Vera Bradley | Rocky Brands vs. Steven Madden | Rocky Brands vs. Wolverine World Wide | Rocky Brands vs. Caleres |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities |