Correlation Between Edgewell Personal and Skechers USA
Can any of the company-specific risk be diversified away by investing in both Edgewell Personal and Skechers USA 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 Edgewell Personal and Skechers USA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Edgewell Personal Care and Skechers USA, you can compare the effects of market volatilities on Edgewell Personal and Skechers USA 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 Edgewell Personal with a short position of Skechers USA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Edgewell Personal and Skechers USA.
Diversification Opportunities for Edgewell Personal and Skechers USA
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Edgewell and Skechers is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Edgewell Personal Care and Skechers USA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Skechers USA and Edgewell Personal 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 Edgewell Personal Care are associated (or correlated) with Skechers USA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Skechers USA has no effect on the direction of Edgewell Personal i.e., Edgewell Personal and Skechers USA go up and down completely randomly.
Pair Corralation between Edgewell Personal and Skechers USA
Considering the 90-day investment horizon Edgewell Personal Care is expected to under-perform the Skechers USA. But the stock apears to be less risky and, when comparing its historical volatility, Edgewell Personal Care is 1.35 times less risky than Skechers USA. The stock trades about -0.02 of its potential returns per unit of risk. The Skechers USA is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 5,361 in Skechers USA on August 31, 2024 and sell it today you would earn a total of 1,021 from holding Skechers USA or generate 19.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Edgewell Personal Care vs. Skechers USA
Performance |
| Timeline |
| Edgewell Personal Care |
| Skechers USA |
Edgewell Personal and Skechers USA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Edgewell Personal and Skechers USA
The main advantage of trading using opposite Edgewell Personal and Skechers USA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Edgewell Personal position performs unexpectedly, Skechers USA 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 Skechers USA will offset losses from the drop in Skechers USA's long position.| Edgewell Personal vs. Aquagold International | Edgewell Personal vs. Morningstar Unconstrained Allocation | Edgewell Personal vs. Thrivent High Yield | Edgewell Personal vs. Via Renewables |
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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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