Correlation Between Skechers USA and European Wax
Can any of the company-specific risk be diversified away by investing in both Skechers USA and European Wax 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 European Wax into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Skechers USA and European Wax Center, you can compare the effects of market volatilities on Skechers USA and European Wax 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 European Wax. Check out your portfolio center. Please also check ongoing floating volatility patterns of Skechers USA and European Wax.
Diversification Opportunities for Skechers USA and European Wax
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Skechers and European is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Skechers USA and European Wax Center in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on European Wax Center 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 European Wax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of European Wax Center has no effect on the direction of Skechers USA i.e., Skechers USA and European Wax go up and down completely randomly.
Pair Corralation between Skechers USA and European Wax
Considering the 90-day investment horizon Skechers USA is expected to generate 0.56 times more return on investment than European Wax. However, Skechers USA is 1.8 times less risky than European Wax. It trades about 0.05 of its potential returns per unit of risk. European Wax Center is currently generating about -0.03 per unit of risk. If you would invest 4,256 in Skechers USA on September 2, 2024 and sell it today you would earn a total of 2,126 from holding Skechers USA or generate 49.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Skechers USA vs. European Wax Center
Performance |
| Timeline |
| Skechers USA |
| European Wax Center |
Skechers USA and European Wax Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Skechers USA and European Wax
The main advantage of trading using opposite Skechers USA and European Wax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Skechers USA position performs unexpectedly, European Wax 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 European Wax will offset losses from the drop in European Wax's long position.| Skechers USA vs. Crocs Inc | Skechers USA vs. On Holding | Skechers USA vs. Nike Inc | Skechers USA vs. Designer Brands |
| European Wax vs. Edgewell Personal Care | European Wax vs. Inter Parfums | European Wax vs. Henkel AG Co | European Wax vs. Mannatech Incorporated |
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.
Other Complementary Tools
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |