Correlation Between Steven Madden and Birkenstock Holding
Can any of the company-specific risk be diversified away by investing in both Steven Madden and Birkenstock Holding 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 Steven Madden and Birkenstock Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Steven Madden and Birkenstock Holding plc, you can compare the effects of market volatilities on Steven Madden and Birkenstock Holding 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 Steven Madden with a short position of Birkenstock Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Steven Madden and Birkenstock Holding.
Diversification Opportunities for Steven Madden and Birkenstock Holding
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Steven and Birkenstock is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Steven Madden and Birkenstock Holding plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Birkenstock Holding plc and Steven Madden 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 Steven Madden are associated (or correlated) with Birkenstock Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Birkenstock Holding plc has no effect on the direction of Steven Madden i.e., Steven Madden and Birkenstock Holding go up and down completely randomly.
Pair Corralation between Steven Madden and Birkenstock Holding
Given the investment horizon of 90 days Steven Madden is expected to under-perform the Birkenstock Holding. But the stock apears to be less risky and, when comparing its historical volatility, Steven Madden is 1.0 times less risky than Birkenstock Holding. The stock trades about 0.0 of its potential returns per unit of risk. The Birkenstock Holding plc is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 4,643 in Birkenstock Holding plc on September 12, 2024 and sell it today you would earn a total of 772.00 from holding Birkenstock Holding plc or generate 16.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Steven Madden vs. Birkenstock Holding plc
Performance |
| Timeline |
| Steven Madden |
| Birkenstock Holding plc |
Steven Madden and Birkenstock Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Steven Madden and Birkenstock Holding
The main advantage of trading using opposite Steven Madden and Birkenstock Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Steven Madden position performs unexpectedly, Birkenstock Holding 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 Birkenstock Holding will offset losses from the drop in Birkenstock Holding's long position.| Steven Madden vs. Weyco Group | Steven Madden vs. Caleres | Steven Madden vs. Rocky Brands | Steven Madden vs. Designer Brands |
| Birkenstock Holding vs. Citi Trends | Birkenstock Holding vs. Stratasys | Birkenstock Holding vs. Steven Madden | Birkenstock Holding vs. Anterix |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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