Correlation Between Skechers USA and Silo Pharma

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

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

Diversification Opportunities for Skechers USA and Silo Pharma

-0.51

Correlation Coefficient

Skechers USA  Silo Pharma

Excellent diversification

The 3 months correlation between Skechers and Silo is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Skechers USA and Silo Pharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silo Pharma 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 Silo Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silo Pharma has no effect on the direction of Skechers USA i.e., Skechers USA and Silo Pharma go up and down completely randomly.

Pair Corralation between Skechers USA and Silo Pharma

Considering the 90-day investment horizon Skechers USA is expected to generate 0.42 times more return on investment than Silo Pharma. However, Skechers USA is 2.38 times less risky than Silo Pharma. It trades about 0.05 of its potential returns per unit of risk. Silo Pharma is currently generating about -0.05 per unit of risk. If you would invest  6,310  in Skechers USA on September 21, 2024 and sell it today you would earn a total of  319.00  from holding Skechers USA or generate 5.06% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Skechers USA  vs.  Silo Pharma

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 inconsistent forward-looking signals, Skechers USA may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Silo Pharma

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Silo Pharma has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's essential indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Skechers USA and Silo Pharma

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

The idea behind Skechers USA and Silo Pharma 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.

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 CEOs Directory module to screen CEOs from public companies around the world.