Correlation Between Skechers USA and Pinterest
Can any of the company-specific risk be diversified away by investing in both Skechers USA and Pinterest 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 Pinterest into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Skechers USA and Pinterest, you can compare the effects of market volatilities on Skechers USA and Pinterest 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 Pinterest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Skechers USA and Pinterest.
Diversification Opportunities for Skechers USA and Pinterest
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Skechers and Pinterest is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Skechers USA and Pinterest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pinterest 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 Pinterest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pinterest has no effect on the direction of Skechers USA i.e., Skechers USA and Pinterest go up and down completely randomly.
Pair Corralation between Skechers USA and Pinterest
Considering the 90-day investment horizon Skechers USA is expected to generate 0.43 times more return on investment than Pinterest. However, Skechers USA is 2.33 times less risky than Pinterest. It trades about 0.11 of its potential returns per unit of risk. Pinterest is currently generating about -0.07 per unit of risk. If you would invest 6,157 in Skechers USA on August 31, 2024 and sell it today you would earn a total of 214.00 from holding Skechers USA or generate 3.48% 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. Pinterest
Performance |
| Timeline |
| Skechers USA |
Skechers USA and Pinterest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Skechers USA and Pinterest
The main advantage of trading using opposite Skechers USA and Pinterest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Skechers USA position performs unexpectedly, Pinterest 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 Pinterest will offset losses from the drop in Pinterest's long position.| Skechers USA vs. Crocs Inc | Skechers USA vs. On Holding | Skechers USA vs. Nike Inc | Skechers USA vs. Designer Brands |
| Pinterest vs. Twilio Inc | Pinterest vs. Meta Platforms | Pinterest vs. Alphabet Inc Class C | Pinterest vs. Alphabet Inc Class A |
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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