Correlation Between Cheniere Energy and Skechers USA
Can any of the company-specific risk be diversified away by investing in both Cheniere Energy 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 Cheniere Energy and Skechers USA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cheniere Energy Partners and Skechers USA, you can compare the effects of market volatilities on Cheniere Energy 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 Cheniere Energy with a short position of Skechers USA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cheniere Energy and Skechers USA.
Diversification Opportunities for Cheniere Energy and Skechers USA
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cheniere and Skechers is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Cheniere Energy Partners and Skechers USA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Skechers USA and Cheniere Energy 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 Cheniere Energy Partners 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 Cheniere Energy i.e., Cheniere Energy and Skechers USA go up and down completely randomly.
Pair Corralation between Cheniere Energy and Skechers USA
Considering the 90-day investment horizon Cheniere Energy Partners is expected to generate 0.9 times more return on investment than Skechers USA. However, Cheniere Energy Partners is 1.12 times less risky than Skechers USA. It trades about 0.51 of its potential returns per unit of risk. Skechers USA is currently generating about 0.11 per unit of risk. If you would invest 4,839 in Cheniere Energy Partners on August 30, 2024 and sell it today you would earn a total of 828.00 from holding Cheniere Energy Partners or generate 17.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cheniere Energy Partners vs. Skechers USA
Performance |
| Timeline |
| Cheniere Energy Partners |
| Skechers USA |
Cheniere Energy and Skechers USA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cheniere Energy and Skechers USA
The main advantage of trading using opposite Cheniere Energy and Skechers USA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cheniere Energy 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.| Cheniere Energy vs. Antero Midstream Partners | Cheniere Energy vs. Excelerate Energy | Cheniere Energy vs. Energy Transfer LP | Cheniere Energy vs. Teekay |
| Skechers USA vs. Steven Madden | Skechers USA vs. Caleres | Skechers USA vs. Weyco Group | Skechers USA vs. Designer Brands |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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