Correlation Between Steven Madden and Lakeland Industries
Can any of the company-specific risk be diversified away by investing in both Steven Madden and Lakeland Industries 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 Lakeland Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Steven Madden and Lakeland Industries, you can compare the effects of market volatilities on Steven Madden and Lakeland Industries 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 Lakeland Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Steven Madden and Lakeland Industries.
Diversification Opportunities for Steven Madden and Lakeland Industries
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Steven and Lakeland is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Steven Madden and Lakeland Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lakeland Industries 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 Lakeland Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lakeland Industries has no effect on the direction of Steven Madden i.e., Steven Madden and Lakeland Industries go up and down completely randomly.
Pair Corralation between Steven Madden and Lakeland Industries
Given the investment horizon of 90 days Steven Madden is expected to under-perform the Lakeland Industries. But the stock apears to be less risky and, when comparing its historical volatility, Steven Madden is 1.38 times less risky than Lakeland Industries. The stock trades about -0.02 of its potential returns per unit of risk. The Lakeland Industries is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 2,005 in Lakeland Industries on August 27, 2024 and sell it today you would earn a total of 156.00 from holding Lakeland Industries or generate 7.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Steven Madden vs. Lakeland Industries
Performance |
| Timeline |
| Steven Madden |
| Lakeland Industries |
Steven Madden and Lakeland Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Steven Madden and Lakeland Industries
The main advantage of trading using opposite Steven Madden and Lakeland Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Steven Madden position performs unexpectedly, Lakeland Industries 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 Lakeland Industries will offset losses from the drop in Lakeland Industries' long position.| Steven Madden vs. Weyco Group | Steven Madden vs. Caleres | Steven Madden vs. Rocky Brands | Steven Madden vs. Designer Brands |
| Lakeland Industries vs. Vince Holding Corp | Lakeland Industries vs. Oxford Industries | Lakeland Industries vs. Gildan Activewear | Lakeland Industries vs. Columbia Sportswear |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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