Correlation Between Skechers USA and Weyco
Can any of the company-specific risk be diversified away by investing in both Skechers USA 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 Skechers USA and Weyco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Skechers USA and Weyco Group, you can compare the effects of market volatilities on Skechers USA 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 Skechers USA with a short position of Weyco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Skechers USA and Weyco.
Diversification Opportunities for Skechers USA and Weyco
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Skechers and Weyco is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Skechers USA and Weyco Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weyco Group and Skechers USA 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 Skechers USA 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 Skechers USA i.e., Skechers USA and Weyco go up and down completely randomly.
Pair Corralation between Skechers USA and Weyco
Considering the 90-day investment horizon Skechers USA is expected to generate 1.7 times less return on investment than Weyco. But when comparing it to its historical volatility, Skechers USA is 3.02 times less risky than Weyco. It trades about 0.11 of its potential returns per unit of risk. Weyco Group is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 3,414 in Weyco Group on August 30, 2024 and sell it today you would earn a total of 149.00 from holding Weyco Group or generate 4.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Skechers USA vs. Weyco Group
Performance |
| Timeline |
| Skechers USA |
| Weyco Group |
Skechers USA and Weyco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Skechers USA and Weyco
The main advantage of trading using opposite Skechers USA and Weyco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Skechers USA 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.| Skechers USA vs. Crocs Inc | Skechers USA vs. On Holding | Skechers USA vs. Nike Inc | Skechers USA vs. Designer 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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