Correlation Between BroadWebAsia and Steven Madden

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

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

Diversification Opportunities for BroadWebAsia and Steven Madden

0.0

Correlation Coefficient

BroadWebAsia  Steven Madden

Pay attention - limited upside

The 3 months correlation between BroadWebAsia and Steven is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding BroadWebAsia and Steven Madden in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Steven Madden and BroadWebAsia 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 BroadWebAsia are associated (or correlated) with Steven Madden. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Steven Madden has no effect on the direction of BroadWebAsia i.e., BroadWebAsia and Steven Madden go up and down completely randomly.

Pair Corralation between BroadWebAsia and Steven Madden

If you would invest  3,500  in Steven Madden on January 31, 2024 and sell it today you would earn a total of  599.00  from holding Steven Madden or generate 17.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

BroadWebAsia  vs.  Steven Madden

BroadWebAsia

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BroadWebAsia has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental drivers, BroadWebAsia is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Steven Madden

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Steven Madden has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Steven Madden is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with BroadWebAsia and Steven Madden

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

The idea behind BroadWebAsia and Steven Madden 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.