Correlation Between Spectrum Brands and Weyco
Can any of the company-specific risk be diversified away by investing in both Spectrum Brands 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 Spectrum Brands and Weyco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Spectrum Brands Holdings and Weyco Group, you can compare the effects of market volatilities on Spectrum Brands 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 Spectrum Brands with a short position of Weyco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spectrum Brands and Weyco.
Diversification Opportunities for Spectrum Brands and Weyco
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Spectrum and Weyco is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Spectrum Brands Holdings and Weyco Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weyco Group and Spectrum Brands 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 Spectrum Brands Holdings 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 Spectrum Brands i.e., Spectrum Brands and Weyco go up and down completely randomly.
Pair Corralation between Spectrum Brands and Weyco
Considering the 90-day investment horizon Spectrum Brands Holdings is expected to generate 0.9 times more return on investment than Weyco. However, Spectrum Brands Holdings is 1.11 times less risky than Weyco. It trades about -0.04 of its potential returns per unit of risk. Weyco Group is currently generating about -0.23 per unit of risk. If you would invest 9,387 in Spectrum Brands Holdings on September 12, 2024 and sell it today you would lose (186.00) from holding Spectrum Brands Holdings or give up 1.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Spectrum Brands Holdings vs. Weyco Group
Performance |
| Timeline |
| Spectrum Brands Holdings |
| Weyco Group |
Spectrum Brands and Weyco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Spectrum Brands and Weyco
The main advantage of trading using opposite Spectrum Brands and Weyco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spectrum Brands 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.| Spectrum Brands vs. European Wax Center | Spectrum Brands vs. Inter Parfums | Spectrum Brands vs. Mannatech Incorporated | Spectrum Brands vs. Nu Skin Enterprises |
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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