Correlation Between Weyco and Spyre Therapeutics

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

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

Diversification Opportunities for Weyco and Spyre Therapeutics

0.38

Correlation Coefficient

Weyco  Spyre Therapeutics

Weak diversification

The 3 months correlation between Weyco and Spyre is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Weyco Group and Spyre Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spyre Therapeutics 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 Spyre Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spyre Therapeutics has no effect on the direction of Weyco i.e., Weyco and Spyre Therapeutics go up and down completely randomly.

Pair Corralation between Weyco and Spyre Therapeutics

Given the investment horizon of 90 days Weyco Group is expected to generate 0.54 times more return on investment than Spyre Therapeutics. However, Weyco Group is 1.86 times less risky than Spyre Therapeutics. It trades about -0.2 of its potential returns per unit of risk. Spyre Therapeutics is currently generating about -0.4 per unit of risk. If you would invest  3,697  in Weyco Group on September 13, 2024 and sell it today you would lose (336.00) from holding Weyco Group or give up 9.09% of portfolio value over 90 days.

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

Weyco Group  vs.  Spyre Therapeutics

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.

Spyre Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Spyre Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Spyre Therapeutics is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Weyco and Spyre Therapeutics

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

The idea behind Weyco Group and Spyre Therapeutics 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.