Correlation Between Tradeweb Markets and Skechers USA

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

By analyzing existing cross correlation between Tradeweb Markets and Skechers USA, you can compare the effects of market volatilities on Tradeweb Markets and Skechers USA 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 Tradeweb Markets with a short position of Skechers USA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tradeweb Markets and Skechers USA.

Diversification Opportunities for Tradeweb Markets and Skechers USA

-0.58

Correlation Coefficient

Tradeweb Markets  Skechers USA

Excellent diversification

The 3 months correlation between Tradeweb and Skechers is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Tradeweb Markets and Skechers USA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Skechers USA and Tradeweb Markets 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 Tradeweb Markets are associated (or correlated) with Skechers USA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Skechers USA has no effect on the direction of Tradeweb Markets i.e., Tradeweb Markets and Skechers USA go up and down completely randomly.

Pair Corralation between Tradeweb Markets and Skechers USA

Allowing for the 90-day total investment horizon Tradeweb Markets is expected to generate 0.54 times more return on investment than Skechers USA. However, Tradeweb Markets is 1.84 times less risky than Skechers USA. It trades about 0.09 of its potential returns per unit of risk. Skechers USA is currently generating about -0.09 per unit of risk. If you would invest  13,261  in Tradeweb Markets on December 20, 2024 and sell it today you would earn a total of  966.00  from holding Tradeweb Markets or generate 7.28% return on investment over 90 days.

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

Tradeweb Markets  vs.  Skechers USA

Tradeweb Markets

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Tradeweb Markets are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, Tradeweb Markets may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Skechers USA

Risk-Adjusted Performance

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 weak performance in the last few months, the Stock's forward-looking signals remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Tradeweb Markets and Skechers USA

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

The idea behind Tradeweb Markets and Skechers USA 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.