Correlation Between Arq and Skechers USA
Can any of the company-specific risk be diversified away by investing in both Arq and Skechers USA 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 Arq and Skechers USA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arq Inc and Skechers USA, you can compare the effects of market volatilities on Arq and Skechers USA 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 Arq with a short position of Skechers USA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arq and Skechers USA.
Diversification Opportunities for Arq and Skechers USA
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Arq and Skechers is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Arq Inc and Skechers USA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Skechers USA and Arq 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 Arq Inc are associated (or correlated) with Skechers USA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Skechers USA has no effect on the direction of Arq i.e., Arq and Skechers USA go up and down completely randomly.
Pair Corralation between Arq and Skechers USA
Considering the 90-day investment horizon Arq Inc is expected to generate 2.55 times more return on investment than Skechers USA. However, Arq is 2.55 times more volatile than Skechers USA. It trades about 0.11 of its potential returns per unit of risk. Skechers USA is currently generating about 0.02 per unit of risk. If you would invest 271.00 in Arq Inc on August 25, 2024 and sell it today you would earn a total of 515.00 from holding Arq Inc or generate 190.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arq Inc vs. Skechers USA
Performance |
| Timeline |
| Arq Inc |
| Skechers USA |
Arq and Skechers USA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arq and Skechers USA
The main advantage of trading using opposite Arq and Skechers USA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arq position performs unexpectedly, Skechers USA 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 Skechers USA will offset losses from the drop in Skechers USA's long position.| Arq vs. Teleflex Incorporated | Arq vs. Keurig Dr Pepper | Arq vs. Sonida Senior Living | Arq vs. Boston Beer |
| Skechers USA vs. Deckers Outdoor | Skechers USA vs. On Holding | Skechers USA vs. Steven Madden | Skechers USA vs. Crocs Inc |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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