Correlation Between Deckers Outdoor and Aya Gold
Can any of the company-specific risk be diversified away by investing in both Deckers Outdoor and Aya Gold 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 Deckers Outdoor and Aya Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Deckers Outdoor and Aya Gold Silver, you can compare the effects of market volatilities on Deckers Outdoor and Aya Gold 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 Deckers Outdoor with a short position of Aya Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deckers Outdoor and Aya Gold.
Diversification Opportunities for Deckers Outdoor and Aya Gold
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Deckers and Aya is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Deckers Outdoor and Aya Gold Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aya Gold Silver and Deckers Outdoor 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 Deckers Outdoor are associated (or correlated) with Aya Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aya Gold Silver has no effect on the direction of Deckers Outdoor i.e., Deckers Outdoor and Aya Gold go up and down completely randomly.
Pair Corralation between Deckers Outdoor and Aya Gold
Given the investment horizon of 90 days Deckers Outdoor is expected to generate 0.7 times more return on investment than Aya Gold. However, Deckers Outdoor is 1.42 times less risky than Aya Gold. It trades about 0.11 of its potential returns per unit of risk. Aya Gold Silver is currently generating about 0.04 per unit of risk. If you would invest 8,183 in Deckers Outdoor on August 31, 2024 and sell it today you would earn a total of 11,413 from holding Deckers Outdoor or generate 139.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Deckers Outdoor vs. Aya Gold Silver
Performance |
| Timeline |
| Deckers Outdoor |
| Aya Gold Silver |
Deckers Outdoor and Aya Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deckers Outdoor and Aya Gold
The main advantage of trading using opposite Deckers Outdoor and Aya Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deckers Outdoor position performs unexpectedly, Aya Gold 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 Aya Gold will offset losses from the drop in Aya Gold's long position.| Deckers Outdoor vs. On Holding | Deckers Outdoor vs. Skechers USA | Deckers Outdoor vs. Nike Inc | Deckers Outdoor vs. Steven Madden |
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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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