Correlation Between Skechers USA and Minerals Technologies
Can any of the company-specific risk be diversified away by investing in both Skechers USA and Minerals Technologies 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 Minerals Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Skechers USA and Minerals Technologies, you can compare the effects of market volatilities on Skechers USA and Minerals Technologies 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 Minerals Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Skechers USA and Minerals Technologies.
Diversification Opportunities for Skechers USA and Minerals Technologies
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Skechers and Minerals is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Skechers USA and Minerals Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Minerals Technologies 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 Minerals Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Minerals Technologies has no effect on the direction of Skechers USA i.e., Skechers USA and Minerals Technologies go up and down completely randomly.
Pair Corralation between Skechers USA and Minerals Technologies
Considering the 90-day investment horizon Skechers USA is expected to generate 1.08 times more return on investment than Minerals Technologies. However, Skechers USA is 1.08 times more volatile than Minerals Technologies. It trades about 0.05 of its potential returns per unit of risk. Minerals Technologies is currently generating about 0.04 per unit of risk. If you would invest 4,175 in Skechers USA on August 24, 2024 and sell it today you would earn a total of 1,994 from holding Skechers USA or generate 47.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Skechers USA vs. Minerals Technologies
Performance |
| Timeline |
| Skechers USA |
| Minerals Technologies |
Skechers USA and Minerals Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Skechers USA and Minerals Technologies
The main advantage of trading using opposite Skechers USA and Minerals Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Skechers USA position performs unexpectedly, Minerals Technologies 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 Minerals Technologies will offset losses from the drop in Minerals Technologies' long position.| Skechers USA vs. Crocs Inc | Skechers USA vs. On Holding | Skechers USA vs. Nike Inc | Skechers USA vs. Designer Brands |
| Minerals Technologies vs. Quaker Chemical | Minerals Technologies vs. Innospec | Minerals Technologies vs. H B Fuller | Minerals Technologies vs. Cabot |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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