Correlation Between Skechers USA and Nebius Group

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

By analyzing existing cross correlation between Skechers USA and Nebius Group NV, you can compare the effects of market volatilities on Skechers USA and Nebius Group 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 Nebius Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Skechers USA and Nebius Group.

Diversification Opportunities for Skechers USA and Nebius Group

0.82

Correlation Coefficient

Skechers USA  Nebius Group

Very poor diversification

The 3 months correlation between Skechers and Nebius is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Skechers USA and Nebius Group NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nebius Group NV 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 Nebius Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nebius Group NV has no effect on the direction of Skechers USA i.e., Skechers USA and Nebius Group go up and down completely randomly.

Pair Corralation between Skechers USA and Nebius Group

Considering the 90-day investment horizon Skechers USA is expected to generate 0.28 times more return on investment than Nebius Group. However, Skechers USA is 3.62 times less risky than Nebius Group. It trades about -0.05 of its potential returns per unit of risk. Nebius Group NV is currently generating about -0.06 per unit of risk. If you would invest  7,039  in Skechers USA on October 11, 2024 and sell it today you would lose (108.00) from holding Skechers USA or give up 1.53% of portfolio value over 90 days.

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

Skechers USA  vs.  Nebius Group NV

Skechers USA

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Skechers USA are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong forward-looking signals, Skechers USA is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Nebius Group NV

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Nebius Group NV are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak forward indicators, Nebius Group unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Skechers USA and Nebius Group

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

The idea behind Skechers USA and Nebius Group NV 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.