Correlation Between Tectonic Therapeutic, and Steven Madden

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

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

Diversification Opportunities for Tectonic Therapeutic, and Steven Madden

0.42

Correlation Coefficient

Tectonic Therapeutic,  Steven Madden

Very weak diversification

The 3 months correlation between Tectonic and Steven is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Tectonic Therapeutic, and Steven Madden in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Steven Madden and Tectonic Therapeutic, 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 Tectonic Therapeutic, 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 Tectonic Therapeutic, i.e., Tectonic Therapeutic, and Steven Madden go up and down completely randomly.

Pair Corralation between Tectonic Therapeutic, and Steven Madden

Given the investment horizon of 90 days Tectonic Therapeutic, is expected to generate 1.12 times less return on investment than Steven Madden. In addition to that, Tectonic Therapeutic, is 1.16 times more volatile than Steven Madden. It trades about 0.04 of its total potential returns per unit of risk. Steven Madden is currently generating about 0.05 per unit of volatility. If you would invest  2,555  in Steven Madden on May 17, 2025 and sell it today you would earn a total of  178.00  from holding Steven Madden or generate 6.97% return on investment over 90 days.

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

Tectonic Therapeutic,  vs.  Steven Madden

Tectonic Therapeutic,

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Tectonic Therapeutic, are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain fundamental indicators, Tectonic Therapeutic, may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Steven Madden

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Steven Madden are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Steven Madden may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Tectonic Therapeutic, and Steven Madden

The main advantage of trading using opposite Tectonic Therapeutic, and Steven Madden positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tectonic Therapeutic, 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 Tectonic Therapeutic, 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.