Correlation Between Steven Madden and Pinstripes Holdings
Can any of the company-specific risk be diversified away by investing in both Steven Madden and Pinstripes Holdings 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 Pinstripes Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Steven Madden and Pinstripes Holdings, you can compare the effects of market volatilities on Steven Madden and Pinstripes Holdings 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 Pinstripes Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Steven Madden and Pinstripes Holdings.
Diversification Opportunities for Steven Madden and Pinstripes Holdings
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Steven and Pinstripes is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Steven Madden and Pinstripes Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pinstripes Holdings 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 Pinstripes Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pinstripes Holdings has no effect on the direction of Steven Madden i.e., Steven Madden and Pinstripes Holdings go up and down completely randomly.
Pair Corralation between Steven Madden and Pinstripes Holdings
Given the investment horizon of 90 days Steven Madden is expected to generate 0.2 times more return on investment than Pinstripes Holdings. However, Steven Madden is 5.07 times less risky than Pinstripes Holdings. It trades about 0.03 of its potential returns per unit of risk. Pinstripes Holdings is currently generating about -0.14 per unit of risk. If you would invest 4,431 in Steven Madden on September 3, 2024 and sell it today you would earn a total of 127.00 from holding Steven Madden or generate 2.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Steven Madden vs. Pinstripes Holdings
Performance |
| Timeline |
| Steven Madden |
| Pinstripes Holdings |
Steven Madden and Pinstripes Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Steven Madden and Pinstripes Holdings
The main advantage of trading using opposite Steven Madden and Pinstripes Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Steven Madden position performs unexpectedly, Pinstripes Holdings 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 Pinstripes Holdings will offset losses from the drop in Pinstripes Holdings' long position.| Steven Madden vs. Weyco Group | Steven Madden vs. Caleres | Steven Madden vs. Rocky Brands | Steven Madden vs. Designer Brands |
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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