Correlation Between Weyco and CP All
Can any of the company-specific risk be diversified away by investing in both Weyco and CP All 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 CP All into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Weyco Group and CP All PCL, you can compare the effects of market volatilities on Weyco and CP All 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 CP All. Check out your portfolio center. Please also check ongoing floating volatility patterns of Weyco and CP All.
Diversification Opportunities for Weyco and CP All
Average diversification
The 3 months correlation between Weyco and CPPCY is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Weyco Group and CP All PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CP All PCL 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 CP All. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CP All PCL has no effect on the direction of Weyco i.e., Weyco and CP All go up and down completely randomly.
Pair Corralation between Weyco and CP All
Given the investment horizon of 90 days Weyco is expected to generate 2.51 times less return on investment than CP All. But when comparing it to its historical volatility, Weyco Group is 1.34 times less risky than CP All. It trades about 0.01 of its potential returns per unit of risk. CP All PCL is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,522 in CP All PCL on December 12, 2024 and sell it today you would earn a total of 42.00 from holding CP All PCL or generate 2.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 88.89% |
| Values | Daily Returns |
Weyco Group vs. CP All PCL
Performance |
| Timeline |
| Weyco Group |
| CP All PCL |
Weyco and CP All Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Weyco and CP All
The main advantage of trading using opposite Weyco and CP All positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Weyco position performs unexpectedly, CP All 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 CP All will offset losses from the drop in CP All's long position.The idea behind Weyco Group and CP All PCL 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.| CP All vs. Jerash Holdings | ||
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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