Correlation Between Deckers Outdoor and Gemfields Group
Can any of the company-specific risk be diversified away by investing in both Deckers Outdoor and Gemfields Group 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 Gemfields Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Deckers Outdoor and Gemfields Group Limited, you can compare the effects of market volatilities on Deckers Outdoor and Gemfields Group 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 Gemfields Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deckers Outdoor and Gemfields Group.
Diversification Opportunities for Deckers Outdoor and Gemfields Group
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Deckers and Gemfields is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Deckers Outdoor and Gemfields Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gemfields Group 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 Gemfields Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gemfields Group has no effect on the direction of Deckers Outdoor i.e., Deckers Outdoor and Gemfields Group go up and down completely randomly.
Pair Corralation between Deckers Outdoor and Gemfields Group
Given the investment horizon of 90 days Deckers Outdoor is expected to generate 0.39 times more return on investment than Gemfields Group. However, Deckers Outdoor is 2.57 times less risky than Gemfields Group. It trades about 0.1 of its potential returns per unit of risk. Gemfields Group Limited is currently generating about -0.02 per unit of risk. If you would invest 8,910 in Deckers Outdoor on August 28, 2024 and sell it today you would earn a total of 10,739 from holding Deckers Outdoor or generate 120.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 41.24% |
| Values | Daily Returns |
Deckers Outdoor vs. Gemfields Group Limited
Performance |
| Timeline |
| Deckers Outdoor |
| Gemfields Group |
Deckers Outdoor and Gemfields Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deckers Outdoor and Gemfields Group
The main advantage of trading using opposite Deckers Outdoor and Gemfields Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deckers Outdoor position performs unexpectedly, Gemfields Group 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 Gemfields Group will offset losses from the drop in Gemfields Group's long position.| Deckers Outdoor vs. On Holding | Deckers Outdoor vs. Skechers USA | Deckers Outdoor vs. Nike Inc | Deckers Outdoor vs. Steven Madden |
| Gemfields Group vs. Morningstar Unconstrained Allocation | Gemfields Group vs. High Yield Municipal Fund | Gemfields Group vs. Knife River | Gemfields Group vs. Klckner Co SE |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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