Correlation Between Weyco and 191216CT5

Can any of the company-specific risk be diversified away by investing in both Weyco and 191216CT5 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 Weyco and 191216CT5 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Weyco Group and COCA COLA CO, you can compare the effects of market volatilities on Weyco and 191216CT5 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 Weyco with a short position of 191216CT5. Check out your portfolio center. Please also check ongoing floating volatility patterns of Weyco and 191216CT5.

Diversification Opportunities for Weyco and 191216CT5

-0.36

Correlation Coefficient

Weyco  191216CT5

Very good diversification

The 3 months correlation between Weyco and 191216CT5 is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Weyco Group and COCA COLA CO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COCA A CO and Weyco 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 Weyco Group are associated (or correlated) with 191216CT5. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COCA A CO has no effect on the direction of Weyco i.e., Weyco and 191216CT5 go up and down completely randomly.

Pair Corralation between Weyco and 191216CT5

Given the investment horizon of 90 days Weyco Group is expected to generate 2.58 times more return on investment than 191216CT5. However, Weyco is 2.58 times more volatile than COCA COLA CO. It trades about 0.05 of its potential returns per unit of risk. COCA COLA CO is currently generating about 0.01 per unit of risk. If you would invest  2,387  in Weyco Group on September 28, 2024 and sell it today you would earn a total of  1,335  from holding Weyco Group or generate 55.93% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.43%
Values	Daily Returns

Weyco Group  vs.  COCA COLA CO

Weyco Group

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Weyco Group are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Weyco unveiled solid returns over the last few months and may actually be approaching a breakup point.

COCA A CO

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days COCA COLA CO has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 191216CT5 is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Weyco and 191216CT5

The main advantage of trading using opposite Weyco and 191216CT5 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Weyco position performs unexpectedly, 191216CT5 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 191216CT5 will offset losses from the drop in 191216CT5's long position.

The idea behind Weyco Group and COCA COLA CO 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.