Correlation Between Canlan Ice and Weyco
Can any of the company-specific risk be diversified away by investing in both Canlan Ice 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 Canlan Ice and Weyco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canlan Ice Sports and Weyco Group, you can compare the effects of market volatilities on Canlan Ice 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 Canlan Ice with a short position of Weyco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canlan Ice and Weyco.
Diversification Opportunities for Canlan Ice and Weyco
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Canlan and Weyco is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Canlan Ice Sports and Weyco Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weyco Group and Canlan Ice 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 Canlan Ice Sports 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 Canlan Ice i.e., Canlan Ice and Weyco go up and down completely randomly.
Pair Corralation between Canlan Ice and Weyco
Assuming the 90 days horizon Canlan Ice is expected to generate 7.28 times less return on investment than Weyco. But when comparing it to its historical volatility, Canlan Ice Sports is 20.96 times less risky than Weyco. It trades about 0.13 of its potential returns per unit of risk. Weyco Group is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2,422 in Weyco Group on September 3, 2024 and sell it today you would earn a total of 1,149 from holding Weyco Group or generate 47.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canlan Ice Sports vs. Weyco Group
Performance |
| Timeline |
| Canlan Ice Sports |
| Weyco Group |
Canlan Ice and Weyco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canlan Ice and Weyco
The main advantage of trading using opposite Canlan Ice and Weyco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canlan Ice 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.| Canlan Ice vs. Weibo Corp | Canlan Ice vs. WiMi Hologram Cloud | Canlan Ice vs. 51Talk Online Education | Canlan Ice vs. Relx PLC ADR |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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