Correlation Between Deckers Outdoor and Gecina SA
Can any of the company-specific risk be diversified away by investing in both Deckers Outdoor and Gecina SA 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 Gecina SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Deckers Outdoor and Gecina SA, you can compare the effects of market volatilities on Deckers Outdoor and Gecina SA 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 Gecina SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deckers Outdoor and Gecina SA.
Diversification Opportunities for Deckers Outdoor and Gecina SA
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Deckers and Gecina is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Deckers Outdoor and Gecina SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gecina SA 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 Gecina SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gecina SA has no effect on the direction of Deckers Outdoor i.e., Deckers Outdoor and Gecina SA go up and down completely randomly.
Pair Corralation between Deckers Outdoor and Gecina SA
Given the investment horizon of 90 days Deckers Outdoor is expected to generate 0.57 times more return on investment than Gecina SA. However, Deckers Outdoor is 1.75 times less risky than Gecina SA. It trades about 0.11 of its potential returns per unit of risk. Gecina SA is currently generating about 0.04 per unit of risk. If you would invest 6,501 in Deckers Outdoor on September 4, 2024 and sell it today you would earn a total of 13,689 from holding Deckers Outdoor or generate 210.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 71.11% |
| Values | Daily Returns |
Deckers Outdoor vs. Gecina SA
Performance |
| Timeline |
| Deckers Outdoor |
| Gecina SA |
Deckers Outdoor and Gecina SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deckers Outdoor and Gecina SA
The main advantage of trading using opposite Deckers Outdoor and Gecina SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deckers Outdoor position performs unexpectedly, Gecina SA 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 Gecina SA will offset losses from the drop in Gecina SA's long position.| Deckers Outdoor vs. On Holding | Deckers Outdoor vs. Steven Madden | Deckers Outdoor vs. Crocs Inc | Deckers Outdoor vs. Designer Brands |
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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