Correlation Between Skechers USA and Safety Shot
Can any of the company-specific risk be diversified away by investing in both Skechers USA and Safety Shot 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 Safety Shot into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Skechers USA and Safety Shot, you can compare the effects of market volatilities on Skechers USA and Safety Shot 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 Safety Shot. Check out your portfolio center. Please also check ongoing floating volatility patterns of Skechers USA and Safety Shot.
Diversification Opportunities for Skechers USA and Safety Shot
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Skechers and Safety is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Skechers USA and Safety Shot in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Safety Shot 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 Safety Shot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Safety Shot has no effect on the direction of Skechers USA i.e., Skechers USA and Safety Shot go up and down completely randomly.
Pair Corralation between Skechers USA and Safety Shot
Considering the 90-day investment horizon Skechers USA is expected to under-perform the Safety Shot. But the stock apears to be less risky and, when comparing its historical volatility, Skechers USA is 10.8 times less risky than Safety Shot. The stock trades about -0.24 of its potential returns per unit of risk. The Safety Shot is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 13.00 in Safety Shot on November 28, 2024 and sell it today you would earn a total of 9.99 from holding Safety Shot or generate 76.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Skechers USA vs. Safety Shot
Performance |
| Timeline |
| Skechers USA |
| Safety Shot |
Skechers USA and Safety Shot Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Skechers USA and Safety Shot
The main advantage of trading using opposite Skechers USA and Safety Shot positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Skechers USA position performs unexpectedly, Safety Shot 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 Safety Shot will offset losses from the drop in Safety Shot's long position.| Skechers USA vs. Crocs Inc | Skechers USA vs. On Holding | Skechers USA vs. Nike Inc | Skechers USA vs. Designer Brands |
| Safety Shot vs. Integral Ad Science | Safety Shot vs. Infosys Ltd ADR | Safety Shot vs. Pinterest | Safety Shot vs. BCE Inc |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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