Correlation Between Skechers USA and Vince Holding
Can any of the company-specific risk be diversified away by investing in both Skechers USA and Vince Holding 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 Vince Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Skechers USA and Vince Holding Corp, you can compare the effects of market volatilities on Skechers USA and Vince Holding 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 Vince Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Skechers USA and Vince Holding.
Diversification Opportunities for Skechers USA and Vince Holding
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Skechers and Vince is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Skechers USA and Vince Holding Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vince Holding Corp 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 Vince Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vince Holding Corp has no effect on the direction of Skechers USA i.e., Skechers USA and Vince Holding go up and down completely randomly.
Pair Corralation between Skechers USA and Vince Holding
Considering the 90-day investment horizon Skechers USA is expected to generate 0.46 times more return on investment than Vince Holding. However, Skechers USA is 2.17 times less risky than Vince Holding. It trades about 0.08 of its potential returns per unit of risk. Vince Holding Corp is currently generating about -0.09 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 | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Skechers USA vs. Vince Holding Corp
Performance |
| Timeline |
| Skechers USA |
| Vince Holding Corp |
Skechers USA and Vince Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Skechers USA and Vince Holding
The main advantage of trading using opposite Skechers USA and Vince Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Skechers USA position performs unexpectedly, Vince Holding 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 Vince Holding will offset losses from the drop in Vince Holding's long position.| Skechers USA vs. On Holding | Skechers USA vs. Steven Madden | Skechers USA vs. Crocs Inc | Skechers USA vs. Designer Brands |
| Vince Holding vs. Ermenegildo Zegna NV | Vince Holding vs. Columbia Sportswear | Vince Holding vs. Gildan Activewear | Vince Holding vs. G III Apparel Group |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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