Correlation Between Skechers USA and TFI International
Can any of the company-specific risk be diversified away by investing in both Skechers USA and TFI International 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 TFI International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Skechers USA and TFI International, you can compare the effects of market volatilities on Skechers USA and TFI International 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 TFI International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Skechers USA and TFI International.
Diversification Opportunities for Skechers USA and TFI International
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Skechers and TFI is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Skechers USA and TFI International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TFI International 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 TFI International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TFI International has no effect on the direction of Skechers USA i.e., Skechers USA and TFI International go up and down completely randomly.
Pair Corralation between Skechers USA and TFI International
Considering the 90-day investment horizon Skechers USA is expected to generate 0.75 times more return on investment than TFI International. However, Skechers USA is 1.34 times less risky than TFI International. It trades about -0.2 of its potential returns per unit of risk. TFI International is currently generating about -0.39 per unit of risk. If you would invest 7,504 in Skechers USA on November 28, 2024 and sell it today you would lose (1,169) from holding Skechers USA or give up 15.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Skechers USA vs. TFI International
Performance |
| Timeline |
| Skechers USA |
| TFI International |
Skechers USA and TFI International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Skechers USA and TFI International
The main advantage of trading using opposite Skechers USA and TFI International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Skechers USA position performs unexpectedly, TFI International 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 TFI International will offset losses from the drop in TFI International's long position.| Skechers USA vs. Crocs Inc | Skechers USA vs. On Holding | Skechers USA vs. Nike Inc | Skechers USA vs. Designer Brands |
| TFI International vs. Old Dominion Freight | TFI International vs. ArcBest Corp | TFI International vs. Marten Transport | TFI International vs. Werner Enterprises |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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