Correlation Between Weyco and SCHLUMBERGER

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

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

Diversification Opportunities for Weyco and SCHLUMBERGER

-0.26

Correlation Coefficient

Weyco  SCHLUMBERGER

Very good diversification

The 3 months correlation between Weyco and SCHLUMBERGER is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Weyco Group and SCHLUMBERGER INVESTMENT SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCHLUMBERGER INVESTMENT 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 SCHLUMBERGER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCHLUMBERGER INVESTMENT has no effect on the direction of Weyco i.e., Weyco and SCHLUMBERGER go up and down completely randomly.

Pair Corralation between Weyco and SCHLUMBERGER

Given the investment horizon of 90 days Weyco Group is expected to generate 5.14 times more return on investment than SCHLUMBERGER. However, Weyco is 5.14 times more volatile than SCHLUMBERGER INVESTMENT SA. It trades about 0.06 of its potential returns per unit of risk. SCHLUMBERGER INVESTMENT SA is currently generating about -0.32 per unit of risk. If you would invest  3,599  in Weyco Group on October 3, 2024 and sell it today you would earn a total of  96.00  from holding Weyco Group or generate 2.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Weyco Group  vs.  SCHLUMBERGER INVESTMENT SA

Weyco Group

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Weyco Group are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Weyco unveiled solid returns over the last few months and may actually be approaching a breakup point.

SCHLUMBERGER INVESTMENT

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SCHLUMBERGER INVESTMENT SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, SCHLUMBERGER 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 SCHLUMBERGER

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

The idea behind Weyco Group and SCHLUMBERGER INVESTMENT SA 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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .