Correlation Between Skechers USA and First Republic
Can any of the company-specific risk be diversified away by investing in both Skechers USA and First Republic 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 First Republic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Skechers USA and First Republic Bank, you can compare the effects of market volatilities on Skechers USA and First Republic 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 First Republic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Skechers USA and First Republic.
Diversification Opportunities for Skechers USA and First Republic
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Skechers and First is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Skechers USA and First Republic Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Republic Bank 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 First Republic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Republic Bank has no effect on the direction of Skechers USA i.e., Skechers USA and First Republic go up and down completely randomly.
Pair Corralation between Skechers USA and First Republic
Considering the 90-day investment horizon Skechers USA is expected to generate 0.07 times more return on investment than First Republic. However, Skechers USA is 14.21 times less risky than First Republic. It trades about 0.06 of its potential returns per unit of risk. First Republic Bank is currently generating about -0.1 per unit of risk. If you would invest 4,475 in Skechers USA on November 2, 2024 and sell it today you would earn a total of 3,059 from holding Skechers USA or generate 68.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 22.27% |
| Values | Daily Returns |
Skechers USA vs. First Republic Bank
Performance |
| Timeline |
| Skechers USA |
| First Republic Bank |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Skechers USA and First Republic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Skechers USA and First Republic
The main advantage of trading using opposite Skechers USA and First Republic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Skechers USA position performs unexpectedly, First Republic 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 First Republic will offset losses from the drop in First Republic's long position.| Skechers USA vs. Crocs Inc | Skechers USA vs. On Holding | Skechers USA vs. Nike Inc | Skechers USA vs. Designer Brands |
| First Republic vs. MYT Netherlands Parent | First Republic vs. Cheche Group Class | First Republic vs. Ziff Davis | First Republic vs. CDW Corp |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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