Correlation Between Yunji and Weyco

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

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

Diversification Opportunities for Yunji and Weyco

-0.7

Correlation Coefficient

Yunji  Weyco

Excellent diversification

The 3 months correlation between Yunji and Weyco is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Yunji Inc and Weyco Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weyco Group and Yunji 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 Yunji Inc are associated (or correlated) with Weyco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Weyco Group has no effect on the direction of Yunji i.e., Yunji and Weyco go up and down completely randomly.

Pair Corralation between Yunji and Weyco

Allowing for the 90-day total investment horizon Yunji is expected to generate 1.3 times less return on investment than Weyco. In addition to that, Yunji is 2.01 times more volatile than Weyco Group. It trades about 0.02 of its total potential returns per unit of risk. Weyco Group is currently generating about 0.05 per unit of volatility. If you would invest  3,316  in Weyco Group on August 30, 2024 and sell it today you would earn a total of  247.00  from holding Weyco Group or generate 7.45% return on investment over 90 days.

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

Yunji Inc  vs.  Weyco Group

Yunji Inc

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Yunji Inc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak forward-looking indicators, Yunji may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Weyco Group

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Weyco Group are ranked lower than 4 (%) 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 December 2024.

Pair Trading with Yunji and Weyco

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

The idea behind Yunji Inc and Weyco Group 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.