Correlation Between Skechers USA and X-FAB Silicon
Can any of the company-specific risk be diversified away by investing in both Skechers USA and X-FAB Silicon 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 X-FAB Silicon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Skechers USA and X FAB Silicon Foundries, you can compare the effects of market volatilities on Skechers USA and X-FAB Silicon 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 X-FAB Silicon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Skechers USA and X-FAB Silicon.
Diversification Opportunities for Skechers USA and X-FAB Silicon
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Skechers and X-FAB is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Skechers USA and X FAB Silicon Foundries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on X FAB Silicon 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 X-FAB Silicon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of X FAB Silicon has no effect on the direction of Skechers USA i.e., Skechers USA and X-FAB Silicon go up and down completely randomly.
Pair Corralation between Skechers USA and X-FAB Silicon
Considering the 90-day investment horizon Skechers USA is expected to generate 0.7 times more return on investment than X-FAB Silicon. However, Skechers USA is 1.42 times less risky than X-FAB Silicon. It trades about 0.08 of its potential returns per unit of risk. X FAB Silicon Foundries is currently generating about -0.05 per unit of risk. If you would invest 4,822 in Skechers USA on October 25, 2024 and sell it today you would earn a total of 2,701 from holding Skechers USA or generate 56.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.68% |
| Values | Daily Returns |
Skechers USA vs. X FAB Silicon Foundries
Performance |
| Timeline |
| Skechers USA |
| X FAB Silicon |
Skechers USA and X-FAB Silicon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Skechers USA and X-FAB Silicon
The main advantage of trading using opposite Skechers USA and X-FAB Silicon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Skechers USA position performs unexpectedly, X-FAB Silicon 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 X-FAB Silicon will offset losses from the drop in X-FAB Silicon's long position.| Skechers USA vs. Crocs Inc | Skechers USA vs. On Holding | Skechers USA vs. Nike Inc | Skechers USA vs. Designer Brands |
| X-FAB Silicon vs. NVIDIA | X-FAB Silicon vs. Intel | X-FAB Silicon vs. Taiwan Semiconductor Manufacturing | X-FAB Silicon vs. Marvell Technology 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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