Correlation Between Weyco and Iridium Communications

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

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

Diversification Opportunities for Weyco and Iridium Communications

0.0

Correlation Coefficient

Weyco  Iridium Communications

Pay attention - limited upside

The 3 months correlation between Weyco and Iridium is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Weyco Group and Iridium Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iridium Communications 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 Iridium Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iridium Communications has no effect on the direction of Weyco i.e., Weyco and Iridium Communications go up and down completely randomly.

Pair Corralation between Weyco and Iridium Communications

Given the investment horizon of 90 days Weyco Group is expected to under-perform the Iridium Communications. In addition to that, Weyco is 1.11 times more volatile than Iridium Communications. It trades about -0.12 of its total potential returns per unit of risk. Iridium Communications is currently generating about 0.16 per unit of volatility. If you would invest  2,831  in Iridium Communications on September 16, 2024 and sell it today you would earn a total of  190.00  from holding Iridium Communications or generate 6.71% return on investment over 90 days.

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

Weyco Group  vs.  Iridium Communications

Weyco Group

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Weyco Group are ranked lower than 4 (%) 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.

Iridium Communications

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Iridium Communications are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain fundamental indicators, Iridium Communications may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Weyco and Iridium Communications

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

The idea behind Weyco Group and Iridium Communications 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.