Correlation Between Skechers USA and Repligen
Can any of the company-specific risk be diversified away by investing in both Skechers USA and Repligen 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 Repligen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Skechers USA and Repligen, you can compare the effects of market volatilities on Skechers USA and Repligen 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 Repligen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Skechers USA and Repligen.
Diversification Opportunities for Skechers USA and Repligen
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Skechers and Repligen is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Skechers USA and Repligen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Repligen 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 Repligen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Repligen has no effect on the direction of Skechers USA i.e., Skechers USA and Repligen go up and down completely randomly.
Pair Corralation between Skechers USA and Repligen
Considering the 90-day investment horizon Skechers USA is expected to under-perform the Repligen. But the stock apears to be less risky and, when comparing its historical volatility, Skechers USA is 1.68 times less risky than Repligen. The stock trades about -0.04 of its potential returns per unit of risk. The Repligen is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 15,675 in Repligen on August 24, 2024 and sell it today you would lose (1,499) from holding Repligen or give up 9.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Skechers USA vs. Repligen
Performance |
| Timeline |
| Skechers USA |
| Repligen |
Skechers USA and Repligen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Skechers USA and Repligen
The main advantage of trading using opposite Skechers USA and Repligen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Skechers USA position performs unexpectedly, Repligen 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 Repligen will offset losses from the drop in Repligen's long position.| Skechers USA vs. Wolverine World Wide | Skechers USA vs. Caleres | Skechers USA vs. Weyco Group | Skechers USA vs. Designer Brands |
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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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