Correlation Between Skechers USA and Stardust Power
Can any of the company-specific risk be diversified away by investing in both Skechers USA and Stardust Power 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 Stardust Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Skechers USA and Stardust Power, you can compare the effects of market volatilities on Skechers USA and Stardust Power 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 Stardust Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Skechers USA and Stardust Power.
Diversification Opportunities for Skechers USA and Stardust Power
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Skechers and Stardust is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Skechers USA and Stardust Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stardust Power 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 Stardust Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stardust Power has no effect on the direction of Skechers USA i.e., Skechers USA and Stardust Power go up and down completely randomly.
Pair Corralation between Skechers USA and Stardust Power
Considering the 90-day investment horizon Skechers USA is expected to generate 0.51 times more return on investment than Stardust Power. However, Skechers USA is 1.95 times less risky than Stardust Power. It trades about 0.38 of its potential returns per unit of risk. Stardust Power is currently generating about -0.44 per unit of risk. If you would invest 6,109 in Skechers USA on September 14, 2024 and sell it today you would earn a total of 901.00 from holding Skechers USA or generate 14.75% 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. Stardust Power
Performance |
| Timeline |
| Skechers USA |
| Stardust Power |
Skechers USA and Stardust Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Skechers USA and Stardust Power
The main advantage of trading using opposite Skechers USA and Stardust Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Skechers USA position performs unexpectedly, Stardust Power 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 Stardust Power will offset losses from the drop in Stardust Power's long position.| Skechers USA vs. Deckers Outdoor | Skechers USA vs. On Holding | Skechers USA vs. Steven Madden | Skechers USA vs. Crocs Inc |
| Stardust Power vs. Coupang LLC | Stardust Power vs. Meiwu Technology Co | Stardust Power vs. Tradeweb Markets | Stardust Power vs. Aegon NV ADR |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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