Correlation Between TerraForm and Skechers USA
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By analyzing existing cross correlation between TerraForm Power 5 and Skechers USA, you can compare the effects of market volatilities on TerraForm 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 TerraForm with a short position of Skechers USA. Check out your portfolio center. Please also check ongoing floating volatility patterns of TerraForm and Skechers USA.
Diversification Opportunities for TerraForm and Skechers USA
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between TerraForm and Skechers is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding TerraForm Power 5 and Skechers USA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Skechers USA and TerraForm 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 TerraForm Power 5 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 TerraForm i.e., TerraForm and Skechers USA go up and down completely randomly.
Pair Corralation between TerraForm and Skechers USA
Assuming the 90 days trading horizon TerraForm Power 5 is expected to generate 40.22 times more return on investment than Skechers USA. However, TerraForm is 40.22 times more volatile than Skechers USA. It trades about 0.07 of its potential returns per unit of risk. Skechers USA is currently generating about 0.04 per unit of risk. If you would invest 9,300 in TerraForm Power 5 on November 27, 2024 and sell it today you would lose (32.00) from holding TerraForm Power 5 or give up 0.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 90.47% |
| Values | Daily Returns |
TerraForm Power 5 vs. Skechers USA
Performance |
| Timeline |
| TerraForm Power 5 |
| Skechers USA |
TerraForm and Skechers USA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TerraForm and Skechers USA
The main advantage of trading using opposite TerraForm and Skechers USA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TerraForm 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.| TerraForm vs. Allient | TerraForm vs. Net Lease Office | TerraForm vs. FTAI Aviation Ltd | TerraForm vs. AerCap Holdings NV |
| 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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