Correlation Between Edgewell Personal and Weyco
Can any of the company-specific risk be diversified away by investing in both Edgewell Personal 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 Edgewell Personal and Weyco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Edgewell Personal Care and Weyco Group, you can compare the effects of market volatilities on Edgewell Personal 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 Edgewell Personal with a short position of Weyco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Edgewell Personal and Weyco.
Diversification Opportunities for Edgewell Personal and Weyco
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Edgewell and Weyco is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Edgewell Personal Care and Weyco Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weyco Group and Edgewell Personal 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 Edgewell Personal Care 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 Edgewell Personal i.e., Edgewell Personal and Weyco go up and down completely randomly.
Pair Corralation between Edgewell Personal and Weyco
Considering the 90-day investment horizon Edgewell Personal is expected to generate 2.81 times less return on investment than Weyco. But when comparing it to its historical volatility, Edgewell Personal Care is 3.27 times less risky than Weyco. It trades about 0.14 of its potential returns per unit of risk. Weyco Group is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 3,368 in Weyco Group on August 28, 2024 and sell it today you would earn a total of 363.00 from holding Weyco Group or generate 10.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Edgewell Personal Care vs. Weyco Group
Performance |
| Timeline |
| Edgewell Personal Care |
| Weyco Group |
Edgewell Personal and Weyco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Edgewell Personal and Weyco
The main advantage of trading using opposite Edgewell Personal and Weyco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Edgewell Personal 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.| Edgewell Personal vs. Mannatech Incorporated | Edgewell Personal vs. Inter Parfums | Edgewell Personal vs. Nu Skin Enterprises | Edgewell Personal vs. Helen of Troy |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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