Correlation Between Weyco and Micron Technology

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

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

Diversification Opportunities for Weyco and Micron Technology

-0.29

Correlation Coefficient

Weyco  Micron Technology

Very good diversification

The 3 months correlation between Weyco and Micron is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Weyco Group and Micron Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Micron Technology 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 Micron Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Micron Technology has no effect on the direction of Weyco i.e., Weyco and Micron Technology go up and down completely randomly.

Pair Corralation between Weyco and Micron Technology

Given the investment horizon of 90 days Weyco is expected to generate 1.53 times less return on investment than Micron Technology. But when comparing it to its historical volatility, Weyco Group is 1.3 times less risky than Micron Technology. It trades about 0.04 of its potential returns per unit of risk. Micron Technology is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  6,113  in Micron Technology on October 12, 2024 and sell it today you would earn a total of  3,821  from holding Micron Technology or generate 62.51% return on investment over 90 days.

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

Weyco Group  vs.  Micron Technology

Weyco Group

Risk-Adjusted Performance

2 of 100

Insignificant

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.

Micron Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Micron Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Micron Technology is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Weyco and Micron Technology

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

The idea behind Weyco Group and Micron Technology 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.