Correlation Between Skechers USA and Raytech Holding
Can any of the company-specific risk be diversified away by investing in both Skechers USA and Raytech Holding 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 Raytech Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Skechers USA and Raytech Holding Limited, you can compare the effects of market volatilities on Skechers USA and Raytech Holding 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 Raytech Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Skechers USA and Raytech Holding.
Diversification Opportunities for Skechers USA and Raytech Holding
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Skechers and Raytech is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Skechers USA and Raytech Holding Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Raytech Holding 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 Raytech Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Raytech Holding has no effect on the direction of Skechers USA i.e., Skechers USA and Raytech Holding go up and down completely randomly.
Pair Corralation between Skechers USA and Raytech Holding
Considering the 90-day investment horizon Skechers USA is expected to under-perform the Raytech Holding. But the stock apears to be less risky and, when comparing its historical volatility, Skechers USA is 5.36 times less risky than Raytech Holding. The stock trades about -0.08 of its potential returns per unit of risk. The Raytech Holding Limited is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 138.00 in Raytech Holding Limited on December 28, 2024 and sell it today you would earn a total of 54.00 from holding Raytech Holding Limited or generate 39.13% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Skechers USA vs. Raytech Holding Limited
Performance |
Timeline |
Skechers USA |
Raytech Holding |
Skechers USA and Raytech Holding Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Skechers USA and Raytech Holding
The main advantage of trading using opposite Skechers USA and Raytech Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Skechers USA position performs unexpectedly, Raytech Holding 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 Raytech Holding will offset losses from the drop in Raytech Holding's long position.Skechers USA vs. Crocs Inc | Skechers USA vs. Nike Inc | Skechers USA vs. Designer Brands | Skechers USA vs. Deckers Outdoor |
Raytech Holding vs. Fair Isaac | Raytech Holding vs. ScanSource | Raytech Holding vs. Joby Aviation | Raytech Holding vs. National Beverage Corp |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
Other Complementary Tools
Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |