Correlation Between Chefs Warehouse and Weyco
Can any of the company-specific risk be diversified away by investing in both Chefs Warehouse 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 Chefs Warehouse and Weyco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Chefs Warehouse and Weyco Group, you can compare the effects of market volatilities on Chefs Warehouse 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 Chefs Warehouse with a short position of Weyco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chefs Warehouse and Weyco.
Diversification Opportunities for Chefs Warehouse and Weyco
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Chefs and Weyco is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding The Chefs Warehouse and Weyco Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weyco Group and Chefs Warehouse 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 The Chefs Warehouse 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 Chefs Warehouse i.e., Chefs Warehouse and Weyco go up and down completely randomly.
Pair Corralation between Chefs Warehouse and Weyco
Given the investment horizon of 90 days The Chefs Warehouse is expected to generate 0.92 times more return on investment than Weyco. However, The Chefs Warehouse is 1.09 times less risky than Weyco. It trades about 0.37 of its potential returns per unit of risk. Weyco Group is currently generating about -0.21 per unit of risk. If you would invest 4,210 in The Chefs Warehouse on September 13, 2024 and sell it today you would earn a total of 656.00 from holding The Chefs Warehouse or generate 15.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Chefs Warehouse vs. Weyco Group
Performance |
| Timeline |
| Chefs Warehouse |
| Weyco Group |
Chefs Warehouse and Weyco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chefs Warehouse and Weyco
The main advantage of trading using opposite Chefs Warehouse and Weyco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chefs Warehouse 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.| Chefs Warehouse vs. US Foods Holding | Chefs Warehouse vs. Sysco | Chefs Warehouse vs. SpartanNash Co | Chefs Warehouse vs. Calavo Growers |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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