Correlation Between Skechers USA and Suburban Propane
Can any of the company-specific risk be diversified away by investing in both Skechers USA and Suburban Propane 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 Suburban Propane into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Skechers USA and Suburban Propane Partners, you can compare the effects of market volatilities on Skechers USA and Suburban Propane 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 Suburban Propane. Check out your portfolio center. Please also check ongoing floating volatility patterns of Skechers USA and Suburban Propane.
Diversification Opportunities for Skechers USA and Suburban Propane
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Skechers and Suburban is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Skechers USA and Suburban Propane Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Suburban Propane Partners 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 Suburban Propane. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Suburban Propane Partners has no effect on the direction of Skechers USA i.e., Skechers USA and Suburban Propane go up and down completely randomly.
Pair Corralation between Skechers USA and Suburban Propane
Considering the 90-day investment horizon Skechers USA is expected to under-perform the Suburban Propane. In addition to that, Skechers USA is 1.19 times more volatile than Suburban Propane Partners. It trades about -0.03 of its total potential returns per unit of risk. Suburban Propane Partners is currently generating about 0.02 per unit of volatility. If you would invest 1,951 in Suburban Propane Partners on September 1, 2024 and sell it today you would earn a total of 34.00 from holding Suburban Propane Partners or generate 1.74% 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. Suburban Propane Partners
Performance |
| Timeline |
| Skechers USA |
| Suburban Propane Partners |
Skechers USA and Suburban Propane Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Skechers USA and Suburban Propane
The main advantage of trading using opposite Skechers USA and Suburban Propane positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Skechers USA position performs unexpectedly, Suburban Propane 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 Suburban Propane will offset losses from the drop in Suburban Propane's long position.| Skechers USA vs. Deckers Outdoor | Skechers USA vs. On Holding | Skechers USA vs. Crocs Inc | Skechers USA vs. Designer Brands |
| Suburban Propane vs. Northwest Natural Gas | Suburban Propane vs. Atmos Energy | Suburban Propane vs. One Gas | Suburban Propane vs. NiSource |
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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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