Correlation Between Phoenix Footwear and Crocs

Can any of the company-specific risk be diversified away by investing in both Phoenix Footwear and Crocs 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 Phoenix Footwear and Crocs into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Phoenix Footwear Group and Crocs Inc, you can compare the effects of market volatilities on Phoenix Footwear and Crocs 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 Phoenix Footwear with a short position of Crocs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Phoenix Footwear and Crocs.

Diversification Opportunities for Phoenix Footwear and Crocs

0.59

Correlation Coefficient

Phoenix Footwear  Crocs

Very weak diversification

The 3 months correlation between Phoenix and Crocs is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Phoenix Footwear Group and Crocs Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crocs Inc and Phoenix Footwear 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 Phoenix Footwear Group are associated (or correlated) with Crocs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crocs Inc has no effect on the direction of Phoenix Footwear i.e., Phoenix Footwear and Crocs go up and down completely randomly.

Pair Corralation between Phoenix Footwear and Crocs

If you would invest  16.00  in Phoenix Footwear Group on September 16, 2024 and sell it today you would earn a total of  0.00  from holding Phoenix Footwear Group or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	1.54%
Values	Daily Returns

Phoenix Footwear Group  vs.  Crocs Inc

Phoenix Footwear

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Phoenix Footwear Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Phoenix Footwear is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Crocs Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Crocs Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Phoenix Footwear and Crocs

The main advantage of trading using opposite Phoenix Footwear and Crocs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Phoenix Footwear position performs unexpectedly, Crocs 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 Crocs will offset losses from the drop in Crocs' long position.

The idea behind Phoenix Footwear Group and Crocs Inc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.