Correlation Between Steven Madden and GigaCloud Technology
Can any of the company-specific risk be diversified away by investing in both Steven Madden and GigaCloud Technology 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 GigaCloud Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Steven Madden and GigaCloud Technology Class, you can compare the effects of market volatilities on Steven Madden and GigaCloud Technology 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 GigaCloud Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Steven Madden and GigaCloud Technology.
Diversification Opportunities for Steven Madden and GigaCloud Technology
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Steven and GigaCloud is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Steven Madden and GigaCloud Technology Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GigaCloud Technology 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 GigaCloud Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GigaCloud Technology has no effect on the direction of Steven Madden i.e., Steven Madden and GigaCloud Technology go up and down completely randomly.
Pair Corralation between Steven Madden and GigaCloud Technology
Given the investment horizon of 90 days Steven Madden is expected to under-perform the GigaCloud Technology. But the stock apears to be less risky and, when comparing its historical volatility, Steven Madden is 3.51 times less risky than GigaCloud Technology. The stock trades about -0.01 of its potential returns per unit of risk. The GigaCloud Technology Class is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2,426 in GigaCloud Technology Class on August 30, 2024 and sell it today you would earn a total of 52.00 from holding GigaCloud Technology Class or generate 2.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Steven Madden vs. GigaCloud Technology Class
Performance |
| Timeline |
| Steven Madden |
| GigaCloud Technology |
Steven Madden and GigaCloud Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Steven Madden and GigaCloud Technology
The main advantage of trading using opposite Steven Madden and GigaCloud Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Steven Madden position performs unexpectedly, GigaCloud Technology 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 GigaCloud Technology will offset losses from the drop in GigaCloud Technology's long position.| Steven Madden vs. Weyco Group | Steven Madden vs. Caleres | Steven Madden vs. Rocky Brands | Steven Madden vs. Designer Brands |
| GigaCloud Technology vs. Arqit Quantum | GigaCloud Technology vs. Telos Corp | GigaCloud Technology vs. Cemtrex | GigaCloud Technology vs. Alarum Technologies |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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