Correlation Between Skechers USA and Asics Corp
Can any of the company-specific risk be diversified away by investing in both Skechers USA and Asics Corp 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 Skechers USA and Asics Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Skechers USA and Asics Corp ADR, you can compare the effects of market volatilities on Skechers USA and Asics Corp 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 Skechers USA with a short position of Asics Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Skechers USA and Asics Corp.
Diversification Opportunities for Skechers USA and Asics Corp
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Skechers and Asics is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Skechers USA and Asics Corp ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asics Corp ADR and Skechers USA 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 Skechers USA are associated (or correlated) with Asics Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asics Corp ADR has no effect on the direction of Skechers USA i.e., Skechers USA and Asics Corp go up and down completely randomly.
Pair Corralation between Skechers USA and Asics Corp
Considering the 90-day investment horizon Skechers USA is expected to generate 4.45 times less return on investment than Asics Corp. But when comparing it to its historical volatility, Skechers USA is 1.38 times less risky than Asics Corp. It trades about 0.08 of its potential returns per unit of risk. Asics Corp ADR is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 1,730 in Asics Corp ADR on August 28, 2024 and sell it today you would earn a total of 223.00 from holding Asics Corp ADR or generate 12.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Skechers USA vs. Asics Corp ADR
Performance |
| Timeline |
| Skechers USA |
| Asics Corp ADR |
Skechers USA and Asics Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Skechers USA and Asics Corp
The main advantage of trading using opposite Skechers USA and Asics Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Skechers USA position performs unexpectedly, Asics Corp 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 Asics Corp will offset losses from the drop in Asics Corp's long position.| Skechers USA vs. On Holding | Skechers USA vs. Steven Madden | Skechers USA vs. Crocs Inc | Skechers USA vs. Designer Brands |
| Asics Corp vs. American Rebel Holdings | Asics Corp vs. American Rebel Holdings | Asics Corp vs. Crocs Inc | Asics Corp vs. On Holding |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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