Correlation Between Weyco and CAVA Group,
Can any of the company-specific risk be diversified away by investing in both Weyco and CAVA Group, 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 Weyco and CAVA Group, into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Weyco Group and CAVA Group,, you can compare the effects of market volatilities on Weyco and CAVA Group, 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 Weyco with a short position of CAVA Group,. Check out your portfolio center. Please also check ongoing floating volatility patterns of Weyco and CAVA Group,.
Diversification Opportunities for Weyco and CAVA Group,
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Weyco and CAVA is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Weyco Group and CAVA Group, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CAVA Group, and Weyco 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 Weyco Group are associated (or correlated) with CAVA Group,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CAVA Group, has no effect on the direction of Weyco i.e., Weyco and CAVA Group, go up and down completely randomly.
Pair Corralation between Weyco and CAVA Group,
Given the investment horizon of 90 days Weyco Group is expected to generate 0.58 times more return on investment than CAVA Group,. However, Weyco Group is 1.73 times less risky than CAVA Group,. It trades about -0.21 of its potential returns per unit of risk. CAVA Group, is currently generating about -0.15 per unit of risk. If you would invest 3,697 in Weyco Group on September 13, 2024 and sell it today you would lose (336.00) from holding Weyco Group or give up 9.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Weyco Group vs. CAVA Group,
Performance |
| Timeline |
| Weyco Group |
| CAVA Group, |
Weyco and CAVA Group, Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Weyco and CAVA Group,
The main advantage of trading using opposite Weyco and CAVA Group, positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Weyco position performs unexpectedly, CAVA Group, 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 CAVA Group, will offset losses from the drop in CAVA Group,'s long position.The idea behind Weyco Group and CAVA Group, pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories |