Correlation Between Steven Madden and Fevertree Drinks
Can any of the company-specific risk be diversified away by investing in both Steven Madden and Fevertree Drinks 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 Fevertree Drinks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Steven Madden and Fevertree Drinks Plc, you can compare the effects of market volatilities on Steven Madden and Fevertree Drinks 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 Fevertree Drinks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Steven Madden and Fevertree Drinks.
Diversification Opportunities for Steven Madden and Fevertree Drinks
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Steven and Fevertree is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Steven Madden and Fevertree Drinks Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fevertree Drinks 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 Fevertree Drinks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fevertree Drinks Plc has no effect on the direction of Steven Madden i.e., Steven Madden and Fevertree Drinks go up and down completely randomly.
Pair Corralation between Steven Madden and Fevertree Drinks
Given the investment horizon of 90 days Steven Madden is expected to generate 1.83 times more return on investment than Fevertree Drinks. However, Steven Madden is 1.83 times more volatile than Fevertree Drinks Plc. It trades about 0.08 of its potential returns per unit of risk. Fevertree Drinks Plc is currently generating about -0.31 per unit of risk. If you would invest 4,489 in Steven Madden on September 4, 2024 and sell it today you would earn a total of 129.00 from holding Steven Madden or generate 2.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Steven Madden vs. Fevertree Drinks Plc
Performance |
| Timeline |
| Steven Madden |
| Fevertree Drinks Plc |
Steven Madden and Fevertree Drinks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Steven Madden and Fevertree Drinks
The main advantage of trading using opposite Steven Madden and Fevertree Drinks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Steven Madden position performs unexpectedly, Fevertree Drinks 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 Fevertree Drinks will offset losses from the drop in Fevertree Drinks' long position.| Steven Madden vs. Weyco Group | Steven Madden vs. Caleres | Steven Madden vs. Rocky Brands | Steven Madden vs. Designer Brands |
| Fevertree Drinks vs. National Beverage Corp | Fevertree Drinks vs. Celsius Holdings | Fevertree Drinks vs. Monster Beverage Corp | Fevertree Drinks vs. Coca Cola Femsa SAB |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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