Correlation Between Skechers USA and Corporacion America
Can any of the company-specific risk be diversified away by investing in both Skechers USA and Corporacion America 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 Corporacion America into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Skechers USA and Corporacion America Airports, you can compare the effects of market volatilities on Skechers USA and Corporacion America 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 Corporacion America. Check out your portfolio center. Please also check ongoing floating volatility patterns of Skechers USA and Corporacion America.
Diversification Opportunities for Skechers USA and Corporacion America
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Skechers and Corporacion is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Skechers USA and Corporacion America Airports in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corporacion America 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 Corporacion America. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corporacion America has no effect on the direction of Skechers USA i.e., Skechers USA and Corporacion America go up and down completely randomly.
Pair Corralation between Skechers USA and Corporacion America
Considering the 90-day investment horizon Skechers USA is expected to generate 8.11 times less return on investment than Corporacion America. But when comparing it to its historical volatility, Skechers USA is 1.03 times less risky than Corporacion America. It trades about 0.01 of its potential returns per unit of risk. Corporacion America Airports is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,452 in Corporacion America Airports on August 27, 2024 and sell it today you would earn a total of 423.00 from holding Corporacion America Airports or generate 29.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Skechers USA vs. Corporacion America Airports
Performance |
| Timeline |
| Skechers USA |
| Corporacion America |
Skechers USA and Corporacion America Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Skechers USA and Corporacion America
The main advantage of trading using opposite Skechers USA and Corporacion America positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Skechers USA position performs unexpectedly, Corporacion America 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 Corporacion America will offset losses from the drop in Corporacion America's long position.| Skechers USA vs. On Holding | Skechers USA vs. Steven Madden | Skechers USA vs. Crocs Inc | Skechers USA vs. Designer Brands |
| Corporacion America vs. Grupo Aeroportuario del | Corporacion America vs. Grupo Aeroportuario del | Corporacion America vs. AerSale Corp | Corporacion America vs. Flughafen Zrich AG |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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