Correlation Between Par Pacific and Weyco

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

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

Diversification Opportunities for Par Pacific and Weyco

-0.2

Correlation Coefficient

Par Pacific  Weyco

Good diversification

The 3 months correlation between Par and Weyco is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Par Pacific Holdings and Weyco Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weyco Group and Par Pacific 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 Par Pacific Holdings 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 Par Pacific i.e., Par Pacific and Weyco go up and down completely randomly.

Pair Corralation between Par Pacific and Weyco

Given the investment horizon of 90 days Par Pacific Holdings is expected to under-perform the Weyco. In addition to that, Par Pacific is 1.12 times more volatile than Weyco Group. It trades about -0.03 of its total potential returns per unit of risk. Weyco Group is currently generating about 0.04 per unit of volatility. If you would invest  2,483  in Weyco Group on October 15, 2024 and sell it today you would earn a total of  964.00  from holding Weyco Group or generate 38.82% return on investment over 90 days.

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

Par Pacific Holdings  vs.  Weyco Group

Par Pacific Holdings

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Par Pacific Holdings are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Par Pacific is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Weyco Group

Risk-Adjusted Performance

2 of 100

Weak

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

Pair Trading with Par Pacific and Weyco

The main advantage of trading using opposite Par Pacific and Weyco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Par Pacific 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.

The idea behind Par Pacific Holdings and Weyco Group 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.