Correlation Between Weyco and May Department

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

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

Diversification Opportunities for Weyco and May Department

0.0

Correlation Coefficient

Weyco  May Department

Pay attention - limited upside

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

Pair Corralation between Weyco and May Department

If you would invest (100.00) in May Department Stores on December 17, 2024 and sell it today you would earn a total of  100.00  from holding May Department Stores or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Weyco Group  vs.  May Department Stores

Weyco Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Weyco Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

May Department Stores

Risk-Adjusted Performance

Very Weak

Over the last 90 days May Department Stores has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, May Department is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Weyco and May Department

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

The idea behind Weyco Group and May Department Stores 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.