Correlation Between Skechers USA and Teleflex Incorporated
Can any of the company-specific risk be diversified away by investing in both Skechers USA and Teleflex Incorporated 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 Teleflex Incorporated into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Skechers USA and Teleflex Incorporated, you can compare the effects of market volatilities on Skechers USA and Teleflex Incorporated 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 Teleflex Incorporated. Check out your portfolio center. Please also check ongoing floating volatility patterns of Skechers USA and Teleflex Incorporated.
Diversification Opportunities for Skechers USA and Teleflex Incorporated
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Skechers and Teleflex is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Skechers USA and Teleflex Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teleflex Incorporated 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 Teleflex Incorporated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Teleflex Incorporated has no effect on the direction of Skechers USA i.e., Skechers USA and Teleflex Incorporated go up and down completely randomly.
Pair Corralation between Skechers USA and Teleflex Incorporated
Considering the 90-day investment horizon Skechers USA is expected to generate 0.45 times more return on investment than Teleflex Incorporated. However, Skechers USA is 2.24 times less risky than Teleflex Incorporated. It trades about 0.08 of its potential returns per unit of risk. Teleflex Incorporated is currently generating about -0.23 per unit of risk. If you would invest 6,186 in Skechers USA on August 28, 2024 and sell it today you would earn a total of 162.00 from holding Skechers USA or generate 2.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Skechers USA vs. Teleflex Incorporated
Performance |
| Timeline |
| Skechers USA |
| Teleflex Incorporated |
Skechers USA and Teleflex Incorporated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Skechers USA and Teleflex Incorporated
The main advantage of trading using opposite Skechers USA and Teleflex Incorporated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Skechers USA position performs unexpectedly, Teleflex Incorporated 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 Teleflex Incorporated will offset losses from the drop in Teleflex Incorporated's long position.| Skechers USA vs. Crocs Inc | Skechers USA vs. On Holding | Skechers USA vs. Nike Inc | Skechers USA vs. Designer Brands |
| Teleflex Incorporated vs. EUDA Health Holdings | Teleflex Incorporated vs. Nutex Health | Teleflex Incorporated vs. Healthcare Triangle | Teleflex Incorporated vs. Mangoceuticals, Common Stock |
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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
Other Complementary Tools
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments |