Correlation Between Steven Madden and SUPER HI

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

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

Diversification Opportunities for Steven Madden and SUPER HI

0.2

Correlation Coefficient

Steven Madden  SUPER HI

Modest diversification

The 3 months correlation between Steven and SUPER is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Steven Madden and SUPER HI INTERNATIONAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SUPER HI INTERNATIONAL and Steven Madden 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 Steven Madden are associated (or correlated) with SUPER HI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SUPER HI INTERNATIONAL has no effect on the direction of Steven Madden i.e., Steven Madden and SUPER HI go up and down completely randomly.

Pair Corralation between Steven Madden and SUPER HI

Given the investment horizon of 90 days Steven Madden is expected to under-perform the SUPER HI. But the stock apears to be less risky and, when comparing its historical volatility, Steven Madden is 1.62 times less risky than SUPER HI. The stock trades about -0.37 of its potential returns per unit of risk. The SUPER HI INTERNATIONAL is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  2,939  in SUPER HI INTERNATIONAL on December 20, 2024 and sell it today you would lose (289.00) from holding SUPER HI INTERNATIONAL or give up 9.83% of portfolio value over 90 days.

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

Steven Madden  vs.  SUPER HI INTERNATIONAL

Steven Madden

Risk-Adjusted Performance

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 uncertain performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

SUPER HI INTERNATIONAL

Risk-Adjusted Performance

Very Weak

Over the last 90 days SUPER HI INTERNATIONAL has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's fundamental indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Steven Madden and SUPER HI

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

The idea behind Steven Madden and SUPER HI INTERNATIONAL 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.