Correlation Between Steven Madden and Snap On
Can any of the company-specific risk be diversified away by investing in both Steven Madden and Snap On 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 Snap On into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Steven Madden and Snap On, you can compare the effects of market volatilities on Steven Madden and Snap On 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 Snap On. Check out your portfolio center. Please also check ongoing floating volatility patterns of Steven Madden and Snap On.
Diversification Opportunities for Steven Madden and Snap On
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Steven and Snap is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Steven Madden and Snap On in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Snap On 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 Snap On. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Snap On has no effect on the direction of Steven Madden i.e., Steven Madden and Snap On go up and down completely randomly.
Pair Corralation between Steven Madden and Snap On
Given the investment horizon of 90 days Steven Madden is expected to generate 1.21 times more return on investment than Snap On. However, Steven Madden is 1.21 times more volatile than Snap On. It trades about 0.06 of its potential returns per unit of risk. Snap On is currently generating about 0.07 per unit of risk. If you would invest 3,132 in Steven Madden on September 12, 2024 and sell it today you would earn a total of 1,220 from holding Steven Madden or generate 38.95% 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. Snap On
Performance |
| Timeline |
| Steven Madden |
| Snap On |
Steven Madden and Snap On Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Steven Madden and Snap On
The main advantage of trading using opposite Steven Madden and Snap On positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Steven Madden position performs unexpectedly, Snap On 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 Snap On will offset losses from the drop in Snap On's long position.| Steven Madden vs. Weyco Group | Steven Madden vs. Caleres | Steven Madden vs. Rocky Brands | Steven Madden vs. Designer Brands |
| Snap On vs. Lincoln Electric Holdings | Snap On vs. Timken Company | Snap On vs. Kennametal | Snap On vs. Toro Co |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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