Correlation Between NORSK and Skechers USA
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By analyzing existing cross correlation between NORSK HYDRO A and Skechers USA, you can compare the effects of market volatilities on NORSK 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 NORSK with a short position of Skechers USA. Check out your portfolio center. Please also check ongoing floating volatility patterns of NORSK and Skechers USA.
Diversification Opportunities for NORSK and Skechers USA
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between NORSK and Skechers is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding NORSK HYDRO A and Skechers USA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Skechers USA and NORSK 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 NORSK HYDRO A 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 NORSK i.e., NORSK and Skechers USA go up and down completely randomly.
Pair Corralation between NORSK and Skechers USA
Assuming the 90 days trading horizon NORSK is expected to generate 5.29 times less return on investment than Skechers USA. But when comparing it to its historical volatility, NORSK HYDRO A is 3.7 times less risky than Skechers USA. It trades about 0.04 of its potential returns per unit of risk. Skechers USA is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 6,186 in Skechers USA on August 29, 2024 and sell it today you would earn a total of 110.00 from holding Skechers USA or generate 1.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 90.91% |
| Values | Daily Returns |
NORSK HYDRO A vs. Skechers USA
Performance |
| Timeline |
| NORSK HYDRO A |
| Skechers USA |
NORSK and Skechers USA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NORSK and Skechers USA
The main advantage of trading using opposite NORSK and Skechers USA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NORSK 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.| NORSK vs. Skechers USA | NORSK vs. Lion One Metals | NORSK vs. Citi Trends | NORSK vs. Inflection Point Acquisition |
| Skechers USA vs. Crocs Inc | Skechers USA vs. On Holding | Skechers USA vs. Nike Inc | Skechers USA vs. Designer Brands |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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