Correlation Between First Watch and Weyco
Can any of the company-specific risk be diversified away by investing in both First Watch 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 First Watch and Weyco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Watch Restaurant and Weyco Group, you can compare the effects of market volatilities on First Watch 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 First Watch with a short position of Weyco. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Watch and Weyco.
Diversification Opportunities for First Watch and Weyco
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between First and Weyco is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding First Watch Restaurant and Weyco Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weyco Group and First Watch 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 First Watch Restaurant 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 First Watch i.e., First Watch and Weyco go up and down completely randomly.
Pair Corralation between First Watch and Weyco
Given the investment horizon of 90 days First Watch is expected to generate 2.11 times less return on investment than Weyco. In addition to that, First Watch is 1.15 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 0.04 per unit of volatility. If you would invest 2,630 in Weyco Group on September 12, 2024 and sell it today you would earn a total of 748.00 from holding Weyco Group or generate 28.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Watch Restaurant vs. Weyco Group
Performance |
| Timeline |
| First Watch Restaurant |
| Weyco Group |
First Watch and Weyco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Watch and Weyco
The main advantage of trading using opposite First Watch and Weyco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Watch 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.| First Watch vs. Noble Romans | First Watch vs. Good Times Restaurants | First Watch vs. Flanigans Enterprises | First Watch vs. FAT Brands |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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