Correlation Between Plexus Corp and Weyco
Can any of the company-specific risk be diversified away by investing in both Plexus Corp and Weyco 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 Plexus Corp and Weyco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Plexus Corp and Weyco Group, you can compare the effects of market volatilities on Plexus Corp and Weyco 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 Plexus Corp with a short position of Weyco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Plexus Corp and Weyco.
Diversification Opportunities for Plexus Corp and Weyco
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Plexus and Weyco is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Plexus Corp and Weyco Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weyco Group and Plexus Corp 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 Plexus Corp are associated (or correlated) with Weyco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Weyco Group has no effect on the direction of Plexus Corp i.e., Plexus Corp and Weyco go up and down completely randomly.
Pair Corralation between Plexus Corp and Weyco
Given the investment horizon of 90 days Plexus Corp is expected to generate 0.63 times more return on investment than Weyco. However, Plexus Corp is 1.6 times less risky than Weyco. It trades about 0.16 of its potential returns per unit of risk. Weyco Group is currently generating about 0.08 per unit of risk. If you would invest 13,077 in Plexus Corp on September 23, 2024 and sell it today you would earn a total of 2,830 from holding Plexus Corp or generate 21.64% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Plexus Corp vs. Weyco Group
Performance |
Timeline |
Plexus Corp |
Weyco Group |
Plexus Corp and Weyco Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Plexus Corp and Weyco
The main advantage of trading using opposite Plexus Corp and Weyco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Plexus Corp position performs unexpectedly, Weyco 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 Weyco will offset losses from the drop in Weyco's long position.Plexus Corp vs. Rigetti Computing | Plexus Corp vs. Quantum Computing | Plexus Corp vs. IONQ Inc | Plexus Corp vs. Quantum |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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