Correlation Between Wolverine World and Movado
Can any of the company-specific risk be diversified away by investing in both Wolverine World and Movado 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 Wolverine World and Movado into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wolverine World Wide and Movado Group, you can compare the effects of market volatilities on Wolverine World and Movado 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 Wolverine World with a short position of Movado. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wolverine World and Movado.
Diversification Opportunities for Wolverine World and Movado
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Wolverine and Movado is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Wolverine World Wide and Movado Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Movado Group and Wolverine World 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 Wolverine World Wide are associated (or correlated) with Movado. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Movado Group has no effect on the direction of Wolverine World i.e., Wolverine World and Movado go up and down completely randomly.
Pair Corralation between Wolverine World and Movado
Considering the 90-day investment horizon Wolverine World Wide is expected to generate 1.78 times more return on investment than Movado. However, Wolverine World is 1.78 times more volatile than Movado Group. It trades about 0.04 of its potential returns per unit of risk. Movado Group is currently generating about -0.04 per unit of risk. If you would invest 1,493 in Wolverine World Wide on August 27, 2024 and sell it today you would earn a total of 847.00 from holding Wolverine World Wide or generate 56.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wolverine World Wide vs. Movado Group
Performance |
| Timeline |
| Wolverine World Wide |
| Movado Group |
Wolverine World and Movado Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wolverine World and Movado
The main advantage of trading using opposite Wolverine World and Movado positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wolverine World position performs unexpectedly, Movado 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 Movado will offset losses from the drop in Movado's long position.| Wolverine World vs. Weyco Group | Wolverine World vs. Rocky Brands | Wolverine World vs. Vera Bradley | Wolverine World vs. Caleres |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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