Correlation Between Deckers Outdoor and SES SA
Can any of the company-specific risk be diversified away by investing in both Deckers Outdoor and SES 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 SES 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 SES SA, you can compare the effects of market volatilities on Deckers Outdoor and SES 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 SES SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deckers Outdoor and SES SA.
Diversification Opportunities for Deckers Outdoor and SES SA
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Deckers and SES is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Deckers Outdoor and SES SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SES 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 SES SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SES SA has no effect on the direction of Deckers Outdoor i.e., Deckers Outdoor and SES SA go up and down completely randomly.
Pair Corralation between Deckers Outdoor and SES SA
Given the investment horizon of 90 days Deckers Outdoor is expected to generate 0.64 times more return on investment than SES SA. However, Deckers Outdoor is 1.56 times less risky than SES SA. It trades about 0.37 of its potential returns per unit of risk. SES SA is currently generating about -0.06 per unit of risk. If you would invest 15,096 in Deckers Outdoor on August 24, 2024 and sell it today you would earn a total of 4,119 from holding Deckers Outdoor or generate 27.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Deckers Outdoor vs. SES SA
Performance |
| Timeline |
| Deckers Outdoor |
| SES SA |
Deckers Outdoor and SES SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deckers Outdoor and SES SA
The main advantage of trading using opposite Deckers Outdoor and SES SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deckers Outdoor position performs unexpectedly, SES 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 SES SA will offset losses from the drop in SES SA's long position.| Deckers Outdoor vs. On Holding | Deckers Outdoor vs. Skechers USA | Deckers Outdoor vs. Nike Inc | Deckers Outdoor vs. Steven Madden |
| SES SA vs. ITV PLC ADR | SES SA vs. iHeartMedia | SES SA vs. ProSiebenSat1 Media AG | SES SA vs. TV Azteca SAB |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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