Correlation Between Wolverine World and Rocky Brands
Can any of the company-specific risk be diversified away by investing in both Wolverine World and Rocky Brands 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 Rocky Brands 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 Rocky Brands, you can compare the effects of market volatilities on Wolverine World and Rocky Brands 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 Rocky Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wolverine World and Rocky Brands.
Diversification Opportunities for Wolverine World and Rocky Brands
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Wolverine and Rocky is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Wolverine World Wide and Rocky Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rocky Brands 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 Rocky Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rocky Brands has no effect on the direction of Wolverine World i.e., Wolverine World and Rocky Brands go up and down completely randomly.
Pair Corralation between Wolverine World and Rocky Brands
Considering the 90-day investment horizon Wolverine World Wide is expected to generate 1.28 times more return on investment than Rocky Brands. However, Wolverine World is 1.28 times more volatile than Rocky Brands. It trades about 0.26 of its potential returns per unit of risk. Rocky Brands is currently generating about -0.13 per unit of risk. If you would invest 1,581 in Wolverine World Wide on August 26, 2024 and sell it today you would earn a total of 759.00 from holding Wolverine World Wide or generate 48.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wolverine World Wide vs. Rocky Brands
Performance |
| Timeline |
| Wolverine World Wide |
| Rocky Brands |
Wolverine World and Rocky Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wolverine World and Rocky Brands
The main advantage of trading using opposite Wolverine World and Rocky Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wolverine World position performs unexpectedly, Rocky Brands 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 Rocky Brands will offset losses from the drop in Rocky Brands' long position.| Wolverine World vs. Weyco Group | Wolverine World vs. Rocky Brands | Wolverine World vs. Vera Bradley | Wolverine World vs. Caleres |
| Rocky Brands vs. Vera Bradley | Rocky Brands vs. Steven Madden | Rocky Brands vs. Wolverine World Wide | Rocky Brands 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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