Correlation Between Saia and Skechers USA

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

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

Diversification Opportunities for Saia and Skechers USA

-0.15

Correlation Coefficient

Saia  Skechers USA

Good diversification

The 3 months correlation between Saia and Skechers is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Saia Inc and Skechers USA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Skechers USA and Saia 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 Saia Inc are associated (or correlated) with Skechers USA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Skechers USA has no effect on the direction of Saia i.e., Saia and Skechers USA go up and down completely randomly.

Pair Corralation between Saia and Skechers USA

Given the investment horizon of 90 days Saia is expected to generate 2.61 times less return on investment than Skechers USA. In addition to that, Saia is 1.35 times more volatile than Skechers USA. It trades about 0.1 of its total potential returns per unit of risk. Skechers USA is currently generating about 0.34 per unit of volatility. If you would invest  6,792  in Skechers USA on October 27, 2024 and sell it today you would earn a total of  769.00  from holding Skechers USA or generate 11.32% return on investment over 90 days.

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

Saia Inc  vs.  Skechers USA

Saia Inc

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Saia Inc are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong forward indicators, Saia is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Skechers USA

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Skechers USA are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak forward-looking signals, Skechers USA showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Saia and Skechers USA

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

The idea behind Saia Inc and Skechers USA 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.