Correlation Between Joint Stock and Skechers USA
Can any of the company-specific risk be diversified away by investing in both Joint Stock 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 Joint Stock and Skechers USA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Joint Stock and Skechers USA, you can compare the effects of market volatilities on Joint Stock 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 Joint Stock with a short position of Skechers USA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Joint Stock and Skechers USA.
Diversification Opportunities for Joint Stock and Skechers USA
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Joint and Skechers is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Joint Stock and Skechers USA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Skechers USA and Joint Stock 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 Joint Stock 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 Joint Stock i.e., Joint Stock and Skechers USA go up and down completely randomly.
Pair Corralation between Joint Stock and Skechers USA
Given the investment horizon of 90 days Joint Stock is expected to under-perform the Skechers USA. In addition to that, Joint Stock is 1.16 times more volatile than Skechers USA. It trades about -0.06 of its total potential returns per unit of risk. Skechers USA is currently generating about 0.11 per unit of volatility. If you would invest 6,157 in Skechers USA on August 31, 2024 and sell it today you would earn a total of 214.00 from holding Skechers USA or generate 3.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Joint Stock vs. Skechers USA
Performance |
| Timeline |
| Joint Stock |
| Skechers USA |
Joint Stock and Skechers USA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Joint Stock and Skechers USA
The main advantage of trading using opposite Joint Stock and Skechers USA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Joint Stock 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.| Joint Stock vs. PVH Corp | Joint Stock vs. Ecoloclean Industrs | Joint Stock vs. Siriuspoint | Joint Stock vs. Commonwealth Bank of |
| Skechers USA vs. Crocs Inc | Skechers USA vs. On Holding | Skechers USA vs. Nike Inc | Skechers USA vs. Designer Brands |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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