Correlation Between Continental and Weyco
Can any of the company-specific risk be diversified away by investing in both Continental 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 Continental and Weyco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Caleres and Weyco Group, you can compare the effects of market volatilities on Continental 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 Continental with a short position of Weyco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Continental and Weyco.
Diversification Opportunities for Continental and Weyco
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Continental and Weyco is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Caleres and Weyco Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weyco Group and Continental 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 Caleres 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 Continental i.e., Continental and Weyco go up and down completely randomly.
Pair Corralation between Continental and Weyco
Considering the 90-day investment horizon Continental is expected to generate 2.29 times less return on investment than Weyco. In addition to that, Continental is 1.14 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 2,853 in Weyco Group on August 26, 2024 and sell it today you would earn a total of 792.00 from holding Weyco Group or generate 27.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Caleres vs. Weyco Group
Performance |
| Timeline |
| Continental |
| Weyco Group |
Continental and Weyco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Continental and Weyco
The main advantage of trading using opposite Continental and Weyco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Continental 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.| Continental vs. Vera Bradley | Continental vs. Wolverine World Wide | Continental vs. Rocky Brands | Continental vs. Steven Madden |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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