Correlation Between Skechers USA and Konami Holdings

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

By analyzing existing cross correlation between Skechers USA and Konami Holdings, you can compare the effects of market volatilities on Skechers USA and Konami Holdings 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 Skechers USA with a short position of Konami Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Skechers USA and Konami Holdings.

Diversification Opportunities for Skechers USA and Konami Holdings

-0.08

Correlation Coefficient

Skechers USA  Konami Holdings

Good diversification

The 3 months correlation between Skechers and Konami is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Skechers USA and Konami Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Konami Holdings and Skechers USA 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 Skechers USA are associated (or correlated) with Konami Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Konami Holdings has no effect on the direction of Skechers USA i.e., Skechers USA and Konami Holdings go up and down completely randomly.

Pair Corralation between Skechers USA and Konami Holdings

If you would invest  6,635  in Skechers USA on September 12, 2024 and sell it today you would earn a total of  404.00  from holding Skechers USA or generate 6.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

Skechers USA  vs.  Konami Holdings

Skechers USA

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Skechers USA are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak forward-looking signals, Skechers USA may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Konami Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Skechers USA and Konami Holdings

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

The idea behind Skechers USA and Konami Holdings 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.