Correlation Between Skechers USA and Zumiez
Can any of the company-specific risk be diversified away by investing in both Skechers USA and Zumiez 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 Zumiez into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Skechers USA and Zumiez Inc, you can compare the effects of market volatilities on Skechers USA and Zumiez 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 Zumiez. Check out your portfolio center. Please also check ongoing floating volatility patterns of Skechers USA and Zumiez.
Diversification Opportunities for Skechers USA and Zumiez
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Skechers and Zumiez is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Skechers USA and Zumiez Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zumiez Inc 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 Zumiez. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zumiez Inc has no effect on the direction of Skechers USA i.e., Skechers USA and Zumiez go up and down completely randomly.
Pair Corralation between Skechers USA and Zumiez
Considering the 90-day investment horizon Skechers USA is expected to generate 0.45 times more return on investment than Zumiez. However, Skechers USA is 2.24 times less risky than Zumiez. It trades about 0.15 of its potential returns per unit of risk. Zumiez Inc is currently generating about -0.21 per unit of risk. If you would invest 6,348 in Skechers USA on September 25, 2024 and sell it today you would earn a total of 378.00 from holding Skechers USA or generate 5.95% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Skechers USA vs. Zumiez Inc
Performance |
Timeline |
Skechers USA |
Zumiez Inc |
Skechers USA and Zumiez Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Skechers USA and Zumiez
The main advantage of trading using opposite Skechers USA and Zumiez positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Skechers USA position performs unexpectedly, Zumiez 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 Zumiez will offset losses from the drop in Zumiez's long position.Skechers USA vs. Weyco Group | Skechers USA vs. Caleres | Skechers USA vs. Designer Brands | Skechers USA vs. Vera Bradley |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
Positions Ratings 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 | |
Equity Valuation Check real value of public entities based on technical and fundamental data | |
Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
Global Correlations Find global opportunities by holding instruments from different markets |