Correlation Between Western Sierra and Skechers USA
Can any of the company-specific risk be diversified away by investing in both Western Sierra and Skechers USA 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 Western Sierra and Skechers USA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Sierra Mining and Skechers USA, you can compare the effects of market volatilities on Western Sierra 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 Western Sierra with a short position of Skechers USA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Sierra and Skechers USA.
Diversification Opportunities for Western Sierra and Skechers USA
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Western and Skechers is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Western Sierra Mining and Skechers USA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Skechers USA and Western Sierra 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 Western Sierra Mining 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 Western Sierra i.e., Western Sierra and Skechers USA go up and down completely randomly.
Pair Corralation between Western Sierra and Skechers USA
Given the investment horizon of 90 days Western Sierra Mining is expected to generate 52.92 times more return on investment than Skechers USA. However, Western Sierra is 52.92 times more volatile than Skechers USA. It trades about 0.1 of its potential returns per unit of risk. Skechers USA is currently generating about 0.05 per unit of risk. If you would invest 8.45 in Western Sierra Mining on September 2, 2024 and sell it today you would lose (7.77) from holding Western Sierra Mining or give up 91.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
Western Sierra Mining vs. Skechers USA
Performance |
| Timeline |
| Western Sierra Mining |
| Skechers USA |
Western Sierra and Skechers USA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Sierra and Skechers USA
The main advantage of trading using opposite Western Sierra and Skechers USA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Sierra 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.| Western Sierra vs. Holloman Energy Corp | Western Sierra vs. cbdMD Inc | Western Sierra vs. Evolus Inc | Western Sierra vs. CV Sciences |
| 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments |