Correlation Between Skechers USA and Stepstone
Can any of the company-specific risk be diversified away by investing in both Skechers USA and Stepstone 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 Stepstone into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Skechers USA and Stepstone Group, you can compare the effects of market volatilities on Skechers USA and Stepstone 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 Stepstone. Check out your portfolio center. Please also check ongoing floating volatility patterns of Skechers USA and Stepstone.
Diversification Opportunities for Skechers USA and Stepstone
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Skechers and Stepstone is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Skechers USA and Stepstone Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stepstone Group 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 Stepstone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stepstone Group has no effect on the direction of Skechers USA i.e., Skechers USA and Stepstone go up and down completely randomly.
Pair Corralation between Skechers USA and Stepstone
Considering the 90-day investment horizon Skechers USA is expected to generate 2.3 times less return on investment than Stepstone. But when comparing it to its historical volatility, Skechers USA is 1.1 times less risky than Stepstone. It trades about 0.05 of its potential returns per unit of risk. Stepstone Group is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 2,661 in Stepstone Group on September 3, 2024 and sell it today you would earn a total of 3,928 from holding Stepstone Group or generate 147.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Skechers USA vs. Stepstone Group
Performance |
| Timeline |
| Skechers USA |
| Stepstone Group |
Skechers USA and Stepstone Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Skechers USA and Stepstone
The main advantage of trading using opposite Skechers USA and Stepstone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Skechers USA position performs unexpectedly, Stepstone 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 Stepstone will offset losses from the drop in Stepstone's long position.| Skechers USA vs. Designer Brands | Skechers USA vs. Steven Madden | Skechers USA vs. Weyco Group | Skechers USA vs. Rocky Brands |
| Stepstone vs. Munivest Fund | Stepstone vs. Blackrock Muniyield Quality | Stepstone vs. Federated Investors B | Stepstone vs. Federated Premier Municipal |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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