Correlation Between Shoe Carnival and Genesco
Can any of the company-specific risk be diversified away by investing in both Shoe Carnival and Genesco 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 Shoe Carnival and Genesco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shoe Carnival and Genesco, you can compare the effects of market volatilities on Shoe Carnival and Genesco 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 Shoe Carnival with a short position of Genesco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shoe Carnival and Genesco.
Diversification Opportunities for Shoe Carnival and Genesco
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Shoe and Genesco is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Shoe Carnival and Genesco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genesco and Shoe Carnival 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 Shoe Carnival are associated (or correlated) with Genesco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genesco has no effect on the direction of Shoe Carnival i.e., Shoe Carnival and Genesco go up and down completely randomly.
Pair Corralation between Shoe Carnival and Genesco
Given the investment horizon of 90 days Shoe Carnival is expected to under-perform the Genesco. But the stock apears to be less risky and, when comparing its historical volatility, Shoe Carnival is 1.16 times less risky than Genesco. The stock trades about -0.38 of its potential returns per unit of risk. The Genesco is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 4,034 in Genesco on November 18, 2024 and sell it today you would earn a total of 55.00 from holding Genesco or generate 1.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shoe Carnival vs. Genesco
Performance |
| Timeline |
| Shoe Carnival |
| Genesco |
Shoe Carnival and Genesco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shoe Carnival and Genesco
The main advantage of trading using opposite Shoe Carnival and Genesco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shoe Carnival position performs unexpectedly, Genesco 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 Genesco will offset losses from the drop in Genesco's long position.| Shoe Carnival vs. Citi Trends | Shoe Carnival vs. Zumiez Inc | Shoe Carnival vs. Buckle Inc | Shoe Carnival vs. Cato Corporation |
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 CEOs Directory module to screen CEOs from public companies around the world.
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