Correlation Between Steven Madden and Freds

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

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

Diversification Opportunities for Steven Madden and Freds

0.0

Correlation Coefficient

Steven Madden  Freds

Pay attention - limited upside

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

Pair Corralation between Steven Madden and Freds

If you would invest  3,475  in Steven Madden on February 2, 2024 and sell it today you would earn a total of  536.00  from holding Steven Madden or generate 15.42% return on investment over 90 days.

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

Steven Madden  vs.  Freds Inc

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 latest stock price disarray, may contribute to short-term losses for the investors.

Freds Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Freds Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Freds is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Steven Madden and Freds

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

The idea behind Steven Madden and Freds Inc 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.

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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.