Correlation Between Dr Martens and Crocs
Can any of the company-specific risk be diversified away by investing in both Dr Martens and Crocs 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 Dr Martens and Crocs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dr Martens plc and Crocs Inc, you can compare the effects of market volatilities on Dr Martens and Crocs 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 Dr Martens with a short position of Crocs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dr Martens and Crocs.
Diversification Opportunities for Dr Martens and Crocs
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between DOCMF and Crocs is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Dr Martens plc and Crocs Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crocs Inc and Dr Martens 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 Dr Martens plc are associated (or correlated) with Crocs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crocs Inc has no effect on the direction of Dr Martens i.e., Dr Martens and Crocs go up and down completely randomly.
Pair Corralation between Dr Martens and Crocs
Assuming the 90 days horizon Dr Martens plc is expected to generate 0.95 times more return on investment than Crocs. However, Dr Martens plc is 1.05 times less risky than Crocs. It trades about -0.03 of its potential returns per unit of risk. Crocs Inc is currently generating about -0.04 per unit of risk. If you would invest 91.00 in Dr Martens plc on January 11, 2025 and sell it today you would lose (23.00) from holding Dr Martens plc or give up 25.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.47% |
| Values | Daily Returns |
Dr Martens plc vs. Crocs Inc
Performance |
| Timeline |
| Dr Martens plc |
| Crocs Inc |
Dr Martens and Crocs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dr Martens and Crocs
The main advantage of trading using opposite Dr Martens and Crocs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dr Martens position performs unexpectedly, Crocs 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 Crocs will offset losses from the drop in Crocs' long position.| Dr Martens vs. American Rebel Holdings | Dr Martens vs. Designer Brands | Dr Martens vs. Renewable Energy and | Dr Martens vs. Crocs Inc |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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