Correlation Between Crocs and 361 Degrees
Can any of the company-specific risk be diversified away by investing in both Crocs and 361 Degrees 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 Crocs and 361 Degrees into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Crocs Inc and 361 Degrees International, you can compare the effects of market volatilities on Crocs and 361 Degrees 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 Crocs with a short position of 361 Degrees. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crocs and 361 Degrees.
Diversification Opportunities for Crocs and 361 Degrees
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Crocs and 361 is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Crocs Inc and 361 Degrees International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 361 Degrees International and Crocs 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 Crocs Inc are associated (or correlated) with 361 Degrees. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 361 Degrees International has no effect on the direction of Crocs i.e., Crocs and 361 Degrees go up and down completely randomly.
Pair Corralation between Crocs and 361 Degrees
Given the investment horizon of 90 days Crocs Inc is expected to generate 0.87 times more return on investment than 361 Degrees. However, Crocs Inc is 1.15 times less risky than 361 Degrees. It trades about -0.11 of its potential returns per unit of risk. 361 Degrees International is currently generating about -0.2 per unit of risk. If you would invest 11,158 in Crocs Inc on August 30, 2024 and sell it today you would lose (598.00) from holding Crocs Inc or give up 5.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Crocs Inc vs. 361 Degrees International
Performance |
| Timeline |
| Crocs Inc |
| 361 Degrees International |
Crocs and 361 Degrees Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Crocs and 361 Degrees
The main advantage of trading using opposite Crocs and 361 Degrees positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crocs position performs unexpectedly, 361 Degrees 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 361 Degrees will offset losses from the drop in 361 Degrees' long position.The idea behind Crocs Inc and 361 Degrees International 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.| 361 Degrees vs. Nike Inc | 361 Degrees vs. Adidas AG ADR | 361 Degrees vs. Deckers Outdoor | 361 Degrees vs. On Holding |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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