Correlation Between Securitas and Weyco

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

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

Diversification Opportunities for Securitas and Weyco

0.62

Correlation Coefficient

Securitas  Weyco

Poor diversification

The 3 months correlation between Securitas and Weyco is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Securitas AB and Weyco Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weyco Group and Securitas 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 Securitas AB 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 Securitas i.e., Securitas and Weyco go up and down completely randomly.

Pair Corralation between Securitas and Weyco

Assuming the 90 days horizon Securitas AB is expected to generate 0.69 times more return on investment than Weyco. However, Securitas AB is 1.44 times less risky than Weyco. It trades about 0.16 of its potential returns per unit of risk. Weyco Group is currently generating about 0.05 per unit of risk. If you would invest  1,070  in Securitas AB on September 7, 2024 and sell it today you would earn a total of  255.00  from holding Securitas AB or generate 23.83% return on investment over 90 days.

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

Securitas AB  vs.  Weyco Group

Securitas AB

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Securitas AB are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak fundamental drivers, Securitas showed solid returns over the last few months and may actually be approaching a breakup point.

Weyco Group

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Weyco Group are ranked lower than 3 (%) 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 January 2025.

Pair Trading with Securitas and Weyco

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

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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.