Correlation Between Newell Brands and Skechers USA
Can any of the company-specific risk be diversified away by investing in both Newell Brands 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 Newell Brands and Skechers USA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Newell Brands and Skechers USA, you can compare the effects of market volatilities on Newell Brands 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 Newell Brands with a short position of Skechers USA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Newell Brands and Skechers USA.
Diversification Opportunities for Newell Brands and Skechers USA
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Newell and Skechers is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Newell Brands and Skechers USA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Skechers USA and Newell Brands 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 Newell Brands 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 Newell Brands i.e., Newell Brands and Skechers USA go up and down completely randomly.
Pair Corralation between Newell Brands and Skechers USA
Considering the 90-day investment horizon Newell Brands is expected to generate 18.76 times less return on investment than Skechers USA. In addition to that, Newell Brands is 1.84 times more volatile than Skechers USA. It trades about 0.0 of its total potential returns per unit of risk. Skechers USA is currently generating about 0.05 per unit of volatility. If you would invest 4,175 in Skechers USA on August 24, 2024 and sell it today you would earn a total of 1,926 from holding Skechers USA or generate 46.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Newell Brands vs. Skechers USA
Performance |
| Timeline |
| Newell Brands |
| Skechers USA |
Newell Brands and Skechers USA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Newell Brands and Skechers USA
The main advantage of trading using opposite Newell Brands and Skechers USA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Newell Brands 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.| Newell Brands vs. The Clorox | Newell Brands vs. Colgate Palmolive | Newell Brands vs. Procter Gamble | Newell Brands vs. Unilever PLC ADR |
| Skechers USA vs. Wolverine World Wide | Skechers USA vs. Caleres | Skechers USA vs. Weyco Group | 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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