Correlation Between Skechers USA and Phoenix Footwear

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

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

Diversification Opportunities for Skechers USA and Phoenix Footwear

0.37

Correlation Coefficient

Skechers USA  Phoenix Footwear

Weak diversification

The 3 months correlation between Skechers and Phoenix is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Skechers USA and Phoenix Footwear Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Phoenix Footwear 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 Phoenix Footwear. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Phoenix Footwear has no effect on the direction of Skechers USA i.e., Skechers USA and Phoenix Footwear go up and down completely randomly.

Pair Corralation between Skechers USA and Phoenix Footwear

If you would invest  16.00  in Phoenix Footwear Group on September 1, 2024 and sell it today you would earn a total of  0.00  from holding Phoenix Footwear Group or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	1.59%
Values	Daily Returns

Skechers USA  vs.  Phoenix Footwear Group

Skechers USA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Skechers USA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong forward-looking signals, Skechers USA is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Phoenix Footwear

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Phoenix Footwear Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Phoenix Footwear is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Skechers USA and Phoenix Footwear

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

The idea behind Skechers USA and Phoenix Footwear Group 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.