Correlation Between Weyco and Genuine Parts
Can any of the company-specific risk be diversified away by investing in both Weyco and Genuine Parts 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 Genuine Parts into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Weyco Group and Genuine Parts Co, you can compare the effects of market volatilities on Weyco and Genuine Parts 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 Genuine Parts. Check out your portfolio center. Please also check ongoing floating volatility patterns of Weyco and Genuine Parts.
Diversification Opportunities for Weyco and Genuine Parts
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Weyco and Genuine is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Weyco Group and Genuine Parts Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genuine Parts 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 Genuine Parts. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genuine Parts has no effect on the direction of Weyco i.e., Weyco and Genuine Parts go up and down completely randomly.
Pair Corralation between Weyco and Genuine Parts
Given the investment horizon of 90 days Weyco Group is expected to generate 1.5 times more return on investment than Genuine Parts. However, Weyco is 1.5 times more volatile than Genuine Parts Co. It trades about 0.01 of its potential returns per unit of risk. Genuine Parts Co is currently generating about -0.12 per unit of risk. If you would invest 3,639 in Weyco Group on September 18, 2024 and sell it today you would earn a total of 7.00 from holding Weyco Group or generate 0.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Weyco Group vs. Genuine Parts Co
Performance |
| Timeline |
| Weyco Group |
| Genuine Parts |
Weyco and Genuine Parts Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Weyco and Genuine Parts
The main advantage of trading using opposite Weyco and Genuine Parts positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Weyco position performs unexpectedly, Genuine Parts 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 Genuine Parts will offset losses from the drop in Genuine Parts' long position.The idea behind Weyco Group and Genuine Parts Co 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.| Genuine Parts vs. Steven Madden | Genuine Parts vs. Vera Bradley | Genuine Parts vs. Caleres | Genuine Parts vs. Wolverine World Wide |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
Other Complementary Tools
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |