Correlation Between Weyco and Bitcoin Depot

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

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

Diversification Opportunities for Weyco and Bitcoin Depot

0.44

Correlation Coefficient

Weyco  Bitcoin Depot

Very weak diversification

The 3 months correlation between Weyco and Bitcoin is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Weyco Group and Bitcoin Depot in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bitcoin Depot 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 Bitcoin Depot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bitcoin Depot has no effect on the direction of Weyco i.e., Weyco and Bitcoin Depot go up and down completely randomly.

Pair Corralation between Weyco and Bitcoin Depot

Given the investment horizon of 90 days Weyco Group is expected to generate 0.36 times more return on investment than Bitcoin Depot. However, Weyco Group is 2.74 times less risky than Bitcoin Depot. It trades about 0.04 of its potential returns per unit of risk. Bitcoin Depot is currently generating about -0.03 per unit of risk. If you would invest  2,525  in Weyco Group on October 24, 2024 and sell it today you would earn a total of  1,073  from holding Weyco Group or generate 42.5% return on investment over 90 days.

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

Weyco Group  vs.  Bitcoin Depot

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.

Bitcoin Depot

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Bitcoin Depot are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile basic indicators, Bitcoin Depot displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Weyco and Bitcoin Depot

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

The idea behind Weyco Group and Bitcoin Depot 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.