Correlation Between Skechers USA and Mars Acquisition
Can any of the company-specific risk be diversified away by investing in both Skechers USA and Mars Acquisition 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 Mars Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Skechers USA and Mars Acquisition Corp, you can compare the effects of market volatilities on Skechers USA and Mars Acquisition 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 Mars Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Skechers USA and Mars Acquisition.
Diversification Opportunities for Skechers USA and Mars Acquisition
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Skechers and Mars is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Skechers USA and Mars Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mars Acquisition Corp 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 Mars Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mars Acquisition Corp has no effect on the direction of Skechers USA i.e., Skechers USA and Mars Acquisition go up and down completely randomly.
Pair Corralation between Skechers USA and Mars Acquisition
Considering the 90-day investment horizon Skechers USA is expected to generate 6.65 times less return on investment than Mars Acquisition. But when comparing it to its historical volatility, Skechers USA is 5.59 times less risky than Mars Acquisition. It trades about 0.06 of its potential returns per unit of risk. Mars Acquisition Corp is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 22.00 in Mars Acquisition Corp on September 12, 2024 and sell it today you would earn a total of 14.00 from holding Mars Acquisition Corp or generate 63.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 40.0% |
| Values | Daily Returns |
Skechers USA vs. Mars Acquisition Corp
Performance |
| Timeline |
| Skechers USA |
| Mars Acquisition Corp |
Skechers USA and Mars Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Skechers USA and Mars Acquisition
The main advantage of trading using opposite Skechers USA and Mars Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Skechers USA position performs unexpectedly, Mars Acquisition 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 Mars Acquisition will offset losses from the drop in Mars Acquisition's long position.| Skechers USA vs. Crocs Inc | Skechers USA vs. On Holding | Skechers USA vs. Nike Inc | Skechers USA vs. Designer Brands |
| Mars Acquisition vs. HUMANA INC | Mars Acquisition vs. Barloworld Ltd ADR | Mars Acquisition vs. Morningstar Unconstrained Allocation | Mars Acquisition vs. Thrivent High Yield |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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