Correlation Between Weyco and Acco Brands

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

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

Diversification Opportunities for Weyco and Acco Brands

0.64

Correlation Coefficient

Weyco  Acco Brands

Poor diversification

The 3 months correlation between Weyco and Acco is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Weyco Group and Acco Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acco Brands 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 Acco Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acco Brands has no effect on the direction of Weyco i.e., Weyco and Acco Brands go up and down completely randomly.

Pair Corralation between Weyco and Acco Brands

Given the investment horizon of 90 days Weyco Group is expected to under-perform the Acco Brands. But the stock apears to be less risky and, when comparing its historical volatility, Weyco Group is 1.11 times less risky than Acco Brands. The stock trades about -0.21 of its potential returns per unit of risk. The Acco Brands is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  613.00  in Acco Brands on September 13, 2024 and sell it today you would lose (13.00) from holding Acco Brands or give up 2.12% of portfolio value over 90 days.

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

Weyco Group  vs.  Acco Brands

Weyco Group

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Weyco Group are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Weyco is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Acco Brands

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Acco Brands are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent fundamental indicators, Acco Brands displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Weyco and Acco Brands

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

The idea behind Weyco Group and Acco Brands 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.