Correlation Between Weyco and YY Group

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

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

Diversification Opportunities for Weyco and YY Group

0.69

Correlation Coefficient

Weyco  YY Group

Poor diversification

The 3 months correlation between Weyco and YYGH is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Weyco Group and YY Group Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YY Group Holding 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 YY Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YY Group Holding has no effect on the direction of Weyco i.e., Weyco and YY Group go up and down completely randomly.

Pair Corralation between Weyco and YY Group

Given the investment horizon of 90 days Weyco Group is expected to generate 0.9 times more return on investment than YY Group. However, Weyco Group is 1.11 times less risky than YY Group. It trades about 0.22 of its potential returns per unit of risk. YY Group Holding is currently generating about -0.15 per unit of risk. If you would invest  3,349  in Weyco Group on October 8, 2024 and sell it today you would earn a total of  325.00  from holding Weyco Group or generate 9.7% return on investment over 90 days.

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

Weyco Group  vs.  YY Group Holding

Weyco Group

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Weyco Group are ranked lower than 6 (%) 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.

YY Group Holding

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in YY Group Holding are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite fairly fragile technical and fundamental indicators, YY Group demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Weyco and YY Group

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

The idea behind Weyco Group and YY Group Holding 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.

Check out your portfolio center.

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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.