Correlation Between Weyco and ALLSTATE

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

By analyzing existing cross correlation between Weyco Group and ALLSTATE P 555, you can compare the effects of market volatilities on Weyco and ALLSTATE 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 ALLSTATE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Weyco and ALLSTATE.

Diversification Opportunities for Weyco and ALLSTATE

-0.02

Correlation Coefficient

Weyco  ALLSTATE

Good diversification

The 3 months correlation between Weyco and ALLSTATE is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Weyco Group and ALLSTATE P 555 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALLSTATE P 555 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 ALLSTATE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALLSTATE P 555 has no effect on the direction of Weyco i.e., Weyco and ALLSTATE go up and down completely randomly.

Pair Corralation between Weyco and ALLSTATE

Given the investment horizon of 90 days Weyco Group is expected to generate 2.52 times more return on investment than ALLSTATE. However, Weyco is 2.52 times more volatile than ALLSTATE P 555. It trades about 0.03 of its potential returns per unit of risk. ALLSTATE P 555 is currently generating about 0.06 per unit of risk. If you would invest  3,435  in Weyco Group on October 23, 2024 and sell it today you would earn a total of  93.00  from holding Weyco Group or generate 2.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	88.33%
Values	Daily Returns

Weyco Group  vs.  ALLSTATE P 555

Weyco Group

Risk-Adjusted Performance

2 of 100

Weak

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 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.

ALLSTATE P 555

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in ALLSTATE P 555 are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, ALLSTATE is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Weyco and ALLSTATE

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

The idea behind Weyco Group and ALLSTATE P 555 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.