Correlation Between Dogness International and Steven Madden
Can any of the company-specific risk be diversified away by investing in both Dogness International and Steven Madden 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 Dogness International and Steven Madden into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dogness International Corp and Steven Madden, you can compare the effects of market volatilities on Dogness International and Steven Madden 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 Dogness International with a short position of Steven Madden. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dogness International and Steven Madden.
Diversification Opportunities for Dogness International and Steven Madden
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dogness and Steven is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Dogness International Corp and Steven Madden in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Steven Madden and Dogness International 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 Dogness International Corp are associated (or correlated) with Steven Madden. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Steven Madden has no effect on the direction of Dogness International i.e., Dogness International and Steven Madden go up and down completely randomly.
Pair Corralation between Dogness International and Steven Madden
Given the investment horizon of 90 days Dogness International Corp is expected to generate 3.46 times more return on investment than Steven Madden. However, Dogness International is 3.46 times more volatile than Steven Madden. It trades about 0.04 of its potential returns per unit of risk. Steven Madden is currently generating about 0.08 per unit of risk. If you would invest 4,550 in Dogness International Corp on September 4, 2024 and sell it today you would earn a total of 55.00 from holding Dogness International Corp or generate 1.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dogness International Corp vs. Steven Madden
Performance |
| Timeline |
| Dogness International |
| Steven Madden |
Dogness International and Steven Madden Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dogness International and Steven Madden
The main advantage of trading using opposite Dogness International and Steven Madden positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dogness International position performs unexpectedly, Steven Madden 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 Steven Madden will offset losses from the drop in Steven Madden's long position.| Dogness International vs. VF Corporation | Dogness International vs. Levi Strauss Co | Dogness International vs. Under Armour A | Dogness International vs. Columbia Sportswear |
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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