Correlation Between ASICS and Dr Martens

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

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

Diversification Opportunities for ASICS and Dr Martens

-0.02

Correlation Coefficient

ASICS  Dr Martens

Good diversification

The 3 months correlation between ASICS and DOCMF is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding ASICS and Dr Martens plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dr Martens plc and ASICS 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 ASICS are associated (or correlated) with Dr Martens. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dr Martens plc has no effect on the direction of ASICS i.e., ASICS and Dr Martens go up and down completely randomly.

Pair Corralation between ASICS and Dr Martens

Assuming the 90 days horizon ASICS is expected to generate 1.86 times more return on investment than Dr Martens. However, ASICS is 1.86 times more volatile than Dr Martens plc. It trades about 0.06 of its potential returns per unit of risk. Dr Martens plc is currently generating about -0.13 per unit of risk. If you would invest  1,976  in ASICS on December 29, 2024 and sell it today you would earn a total of  224.00  from holding ASICS or generate 11.34% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.16%
Values	Daily Returns

ASICS  vs.  Dr Martens plc

ASICS

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ASICS are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal fundamental indicators, ASICS reported solid returns over the last few months and may actually be approaching a breakup point.

Dr Martens plc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Dr Martens plc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's primary indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with ASICS and Dr Martens

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

The idea behind ASICS and Dr Martens plc 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.