Correlation Between Weyco and Torex Gold

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

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

Diversification Opportunities for Weyco and Torex Gold

0.31

Correlation Coefficient

Weyco  Torex Gold

Weak diversification

The 3 months correlation between Weyco and Torex is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Weyco Group and Torex Gold Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Torex Gold Resources 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 Torex Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Torex Gold Resources has no effect on the direction of Weyco i.e., Weyco and Torex Gold go up and down completely randomly.

Pair Corralation between Weyco and Torex Gold

Given the investment horizon of 90 days Weyco is expected to generate 2.42 times less return on investment than Torex Gold. But when comparing it to its historical volatility, Weyco Group is 1.33 times less risky than Torex Gold. It trades about 0.06 of its potential returns per unit of risk. Torex Gold Resources is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  936.00  in Torex Gold Resources on September 14, 2024 and sell it today you would earn a total of  1,008  from holding Torex Gold Resources or generate 107.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	99.63%
Values	Daily Returns

Weyco Group  vs.  Torex Gold Resources

Weyco Group

Risk-Adjusted Performance

4 of 100

Weak

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.

Torex Gold Resources

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Torex Gold Resources are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Torex Gold is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Weyco and Torex Gold

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

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