Correlation Between Plexus Corp and Skechers USA
Can any of the company-specific risk be diversified away by investing in both Plexus Corp 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 Plexus Corp and Skechers USA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Plexus Corp and Skechers USA, you can compare the effects of market volatilities on Plexus Corp 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 Plexus Corp with a short position of Skechers USA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Plexus Corp and Skechers USA.
Diversification Opportunities for Plexus Corp and Skechers USA
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Plexus and Skechers is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Plexus Corp and Skechers USA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Skechers USA and Plexus Corp 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 Plexus Corp 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 Plexus Corp i.e., Plexus Corp and Skechers USA go up and down completely randomly.
Pair Corralation between Plexus Corp and Skechers USA
Given the investment horizon of 90 days Plexus Corp is expected to generate 1.64 times more return on investment than Skechers USA. However, Plexus Corp is 1.64 times more volatile than Skechers USA. It trades about 0.22 of its potential returns per unit of risk. Skechers USA is currently generating about 0.09 per unit of risk. If you would invest 14,332 in Plexus Corp on August 29, 2024 and sell it today you would earn a total of 1,901 from holding Plexus Corp or generate 13.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Plexus Corp vs. Skechers USA
Performance |
| Timeline |
| Plexus Corp |
| Skechers USA |
Plexus Corp and Skechers USA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Plexus Corp and Skechers USA
The main advantage of trading using opposite Plexus Corp and Skechers USA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Plexus Corp 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.| Plexus Corp vs. Richardson Electronics | Plexus Corp vs. Interlink Electronics | Plexus Corp vs. SigmaTron International | Plexus Corp vs. Ouster Inc |
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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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