Correlation Between Weyco and 055450AH3

Can any of the company-specific risk be diversified away by investing in both Weyco and 055450AH3 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 055450AH3 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Weyco Group and BHP 642 01 MAR 26, you can compare the effects of market volatilities on Weyco and 055450AH3 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 055450AH3. Check out your portfolio center. Please also check ongoing floating volatility patterns of Weyco and 055450AH3.

Diversification Opportunities for Weyco and 055450AH3

-0.19

Correlation Coefficient

Weyco  055450AH3

Good diversification

The 3 months correlation between Weyco and 055450AH3 is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Weyco Group and BHP 642 01 MAR 26 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BHP 642 01 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 055450AH3. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BHP 642 01 has no effect on the direction of Weyco i.e., Weyco and 055450AH3 go up and down completely randomly.

Pair Corralation between Weyco and 055450AH3

Given the investment horizon of 90 days Weyco Group is expected to under-perform the 055450AH3. In addition to that, Weyco is 3.72 times more volatile than BHP 642 01 MAR 26. It trades about -0.22 of its total potential returns per unit of risk. BHP 642 01 MAR 26 is currently generating about -0.02 per unit of volatility. If you would invest  10,225  in BHP 642 01 MAR 26 on December 23, 2024 and sell it today you would lose (55.00) from holding BHP 642 01 MAR 26 or give up 0.54% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	75.41%
Values	Daily Returns

Weyco Group  vs.  BHP 642 01 MAR 26

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.

BHP 642 01

Risk-Adjusted Performance

OK

Over the last 90 days BHP 642 01 MAR 26 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 055450AH3 is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Weyco and 055450AH3

The main advantage of trading using opposite Weyco and 055450AH3 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Weyco position performs unexpectedly, 055450AH3 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 055450AH3 will offset losses from the drop in 055450AH3's long position.

The idea behind Weyco Group and BHP 642 01 MAR 26 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.