Correlation Between Weyco and KAISER

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

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

Diversification Opportunities for Weyco and KAISER

-0.22

Correlation Coefficient

Weyco  KAISER

Very good diversification

The 3 months correlation between Weyco and KAISER is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Weyco Group and KAISER FOUNDATION HOSPITALS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KAISER FOUNDATION 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 KAISER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KAISER FOUNDATION has no effect on the direction of Weyco i.e., Weyco and KAISER go up and down completely randomly.

Pair Corralation between Weyco and KAISER

Given the investment horizon of 90 days Weyco Group is expected to under-perform the KAISER. But the stock apears to be less risky and, when comparing its historical volatility, Weyco Group is 1.33 times less risky than KAISER. The stock trades about -0.12 of its potential returns per unit of risk. The KAISER FOUNDATION HOSPITALS is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest  6,907  in KAISER FOUNDATION HOSPITALS on October 27, 2024 and sell it today you would earn a total of  551.00  from holding KAISER FOUNDATION HOSPITALS or generate 7.98% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	89.47%
Values	Daily Returns

Weyco Group  vs.  KAISER FOUNDATION HOSPITALS

Weyco Group

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Weyco Group are ranked lower than 3 (%) 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.

KAISER FOUNDATION

Risk-Adjusted Performance

7 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in KAISER FOUNDATION HOSPITALS are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat fragile basic indicators, KAISER sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Weyco and KAISER

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

The idea behind Weyco Group and KAISER FOUNDATION HOSPITALS 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.