Correlation Between Skechers USA and EON Resources
Can any of the company-specific risk be diversified away by investing in both Skechers USA and EON Resources 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 EON Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Skechers USA and EON Resources, you can compare the effects of market volatilities on Skechers USA and EON Resources 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 EON Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Skechers USA and EON Resources.
Diversification Opportunities for Skechers USA and EON Resources
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Skechers and EON is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Skechers USA and EON Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EON Resources 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 EON Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EON Resources has no effect on the direction of Skechers USA i.e., Skechers USA and EON Resources go up and down completely randomly.
Pair Corralation between Skechers USA and EON Resources
Considering the 90-day investment horizon Skechers USA is expected to generate 0.29 times more return on investment than EON Resources. However, Skechers USA is 3.4 times less risky than EON Resources. It trades about 0.15 of its potential returns per unit of risk. EON Resources is currently generating about -0.13 per unit of risk. If you would invest 6,348 in Skechers USA on September 26, 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. EON Resources
Performance |
Timeline |
Skechers USA |
EON Resources |
Skechers USA and EON Resources Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Skechers USA and EON Resources
The main advantage of trading using opposite Skechers USA and EON Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Skechers USA position performs unexpectedly, EON Resources 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 EON Resources will offset losses from the drop in EON Resources' long position.Skechers USA vs. Weyco Group | Skechers USA vs. Caleres | Skechers USA vs. Designer Brands | Skechers USA vs. Vera Bradley |
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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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