Correlation Between Skechers USA and Viking Holdings
Can any of the company-specific risk be diversified away by investing in both Skechers USA and Viking Holdings 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 Viking Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Skechers USA and Viking Holdings, you can compare the effects of market volatilities on Skechers USA and Viking Holdings 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 Viking Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Skechers USA and Viking Holdings.
Diversification Opportunities for Skechers USA and Viking Holdings
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Skechers and Viking is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Skechers USA and Viking Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Viking Holdings 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 Viking Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Viking Holdings has no effect on the direction of Skechers USA i.e., Skechers USA and Viking Holdings go up and down completely randomly.
Pair Corralation between Skechers USA and Viking Holdings
Considering the 90-day investment horizon Skechers USA is expected to generate 1.27 times less return on investment than Viking Holdings. In addition to that, Skechers USA is 1.03 times more volatile than Viking Holdings. It trades about 0.29 of its total potential returns per unit of risk. Viking Holdings is currently generating about 0.37 per unit of volatility. If you would invest 4,381 in Viking Holdings on November 3, 2024 and sell it today you would earn a total of 682.00 from holding Viking Holdings or generate 15.57% 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. Viking Holdings
Performance |
| Timeline |
| Skechers USA |
| Viking Holdings |
Skechers USA and Viking Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Skechers USA and Viking Holdings
The main advantage of trading using opposite Skechers USA and Viking Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Skechers USA position performs unexpectedly, Viking Holdings 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 Viking Holdings will offset losses from the drop in Viking Holdings' long position.| Skechers USA vs. Crocs Inc | Skechers USA vs. On Holding | Skechers USA vs. Nike Inc | Skechers USA vs. Designer Brands |
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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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