Correlation Between Skechers USA and Hitachi Metals
Can any of the company-specific risk be diversified away by investing in both Skechers USA and Hitachi Metals 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 Hitachi Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Skechers USA and Hitachi Metals, you can compare the effects of market volatilities on Skechers USA and Hitachi Metals 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 Hitachi Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Skechers USA and Hitachi Metals.
Diversification Opportunities for Skechers USA and Hitachi Metals
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Skechers and Hitachi is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Skechers USA and Hitachi Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hitachi Metals 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 Hitachi Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hitachi Metals has no effect on the direction of Skechers USA i.e., Skechers USA and Hitachi Metals go up and down completely randomly.
Pair Corralation between Skechers USA and Hitachi Metals
If you would invest 100,000,000 in Hitachi Metals on August 31, 2024 and sell it today you would earn a total of 0.00 from holding Hitachi Metals or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 0.79% |
| Values | Daily Returns |
Skechers USA vs. Hitachi Metals
Performance |
| Timeline |
| Skechers USA |
| Hitachi Metals |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Skechers USA and Hitachi Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Skechers USA and Hitachi Metals
The main advantage of trading using opposite Skechers USA and Hitachi Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Skechers USA position performs unexpectedly, Hitachi Metals 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 Hitachi Metals will offset losses from the drop in Hitachi Metals' long position.| Skechers USA vs. Crocs Inc | Skechers USA vs. On Holding | Skechers USA vs. Nike Inc | Skechers USA vs. Designer Brands |
| Hitachi Metals vs. RBC Bearings Incorporated | Hitachi Metals vs. Rocky Brands | Hitachi Metals vs. Universal Technical Institute | Hitachi Metals vs. Skechers USA |
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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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