Correlation Between Joint Corp and Steven Madden

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

By analyzing existing cross correlation between The Joint Corp and Steven Madden, you can compare the effects of market volatilities on Joint Corp and Steven Madden 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 Joint Corp with a short position of Steven Madden. Check out your portfolio center. Please also check ongoing floating volatility patterns of Joint Corp and Steven Madden.

Diversification Opportunities for Joint Corp and Steven Madden

-0.05

Correlation Coefficient

Joint Corp  Steven Madden

Good diversification

The 3 months correlation between Joint and Steven is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding The Joint Corp and Steven Madden in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Steven Madden and Joint Corp 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 The Joint Corp are associated (or correlated) with Steven Madden. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Steven Madden has no effect on the direction of Joint Corp i.e., Joint Corp and Steven Madden go up and down completely randomly.

Pair Corralation between Joint Corp and Steven Madden

Given the investment horizon of 90 days The Joint Corp is expected to generate 1.47 times more return on investment than Steven Madden. However, Joint Corp is 1.47 times more volatile than Steven Madden. It trades about -0.03 of its potential returns per unit of risk. Steven Madden is currently generating about -0.09 per unit of risk. If you would invest  1,108  in The Joint Corp on September 21, 2024 and sell it today you would lose (75.00) from holding The Joint Corp or give up 6.77% of portfolio value over 90 days.

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

The Joint Corp  vs.  Steven Madden

Joint Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days The Joint Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Joint Corp is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Steven Madden

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Steven Madden has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest inconsistent performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Joint Corp and Steven Madden

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

The idea behind The Joint Corp and Steven Madden 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.