Correlation Between Newell and Skechers USA
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By analyzing existing cross correlation between Newell Brands 42 and Skechers USA, you can compare the effects of market volatilities on Newell and Skechers USA 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 Newell with a short position of Skechers USA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Newell and Skechers USA.
Diversification Opportunities for Newell and Skechers USA
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Newell and Skechers is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Newell Brands 42 and Skechers USA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Skechers USA and Newell 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 Newell Brands 42 are associated (or correlated) with Skechers USA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Skechers USA has no effect on the direction of Newell i.e., Newell and Skechers USA go up and down completely randomly.
Pair Corralation between Newell and Skechers USA
Assuming the 90 days trading horizon Newell Brands 42 is expected to under-perform the Skechers USA. In addition to that, Newell is 1.01 times more volatile than Skechers USA. It trades about -0.22 of its total potential returns per unit of risk. Skechers USA is currently generating about 0.38 per unit of volatility. If you would invest 6,076 in Skechers USA on September 13, 2024 and sell it today you would earn a total of 934.00 from holding Skechers USA or generate 15.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Newell Brands 42 vs. Skechers USA
Performance |
| Timeline |
| Newell Brands 42 |
| Skechers USA |
Newell and Skechers USA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Newell and Skechers USA
The main advantage of trading using opposite Newell and Skechers USA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Newell position performs unexpectedly, Skechers USA 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 Skechers USA will offset losses from the drop in Skechers USA's long position.| Newell vs. Viemed Healthcare | Newell vs. Vishay Intertechnology | Newell vs. Teradyne | Newell vs. STMicroelectronics NV ADR |
| Skechers USA vs. Deckers Outdoor | Skechers USA vs. On Holding | Skechers USA vs. Steven Madden | Skechers USA vs. Crocs Inc |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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