Correlation Between Steven Madden and Lands End
Can any of the company-specific risk be diversified away by investing in both Steven Madden and Lands End 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 Lands End into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Steven Madden and Lands End, you can compare the effects of market volatilities on Steven Madden and Lands End 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 Lands End. Check out your portfolio center. Please also check ongoing floating volatility patterns of Steven Madden and Lands End.
Diversification Opportunities for Steven Madden and Lands End
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Steven and Lands is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Steven Madden and Lands End in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lands End 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 Lands End. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lands End has no effect on the direction of Steven Madden i.e., Steven Madden and Lands End go up and down completely randomly.
Pair Corralation between Steven Madden and Lands End
Given the investment horizon of 90 days Steven Madden is expected to under-perform the Lands End. But the stock apears to be less risky and, when comparing its historical volatility, Steven Madden is 1.85 times less risky than Lands End. The stock trades about -0.04 of its potential returns per unit of risk. The Lands End is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,324 in Lands End on October 23, 2024 and sell it today you would earn a total of 4.50 from holding Lands End or generate 0.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Steven Madden vs. Lands End
Performance |
| Timeline |
| Steven Madden |
| Lands End |
Steven Madden and Lands End Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Steven Madden and Lands End
The main advantage of trading using opposite Steven Madden and Lands End positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Steven Madden position performs unexpectedly, Lands End 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 Lands End will offset losses from the drop in Lands End's long position.| Steven Madden vs. Weyco Group | Steven Madden vs. Caleres | Steven Madden vs. Rocky Brands | Steven Madden vs. Designer Brands |
| Lands End vs. Vera Bradley | Lands End vs. Wolverine World Wide | Lands End vs. Rocky Brands | Lands End vs. Steven Madden |
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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