Correlation Between Weyco and Kansai Electric
Can any of the company-specific risk be diversified away by investing in both Weyco and Kansai Electric 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 Kansai Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Weyco Group and The Kansai Electric, you can compare the effects of market volatilities on Weyco and Kansai Electric 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 Kansai Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Weyco and Kansai Electric.
Diversification Opportunities for Weyco and Kansai Electric
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Weyco and Kansai is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Weyco Group and The Kansai Electric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kansai Electric 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 Kansai Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kansai Electric has no effect on the direction of Weyco i.e., Weyco and Kansai Electric go up and down completely randomly.
Pair Corralation between Weyco and Kansai Electric
Given the investment horizon of 90 days Weyco Group is expected to generate 1.11 times more return on investment than Kansai Electric. However, Weyco is 1.11 times more volatile than The Kansai Electric. It trades about 0.05 of its potential returns per unit of risk. The Kansai Electric is currently generating about 0.04 per unit of risk. If you would invest 2,844 in Weyco Group on September 3, 2024 and sell it today you would earn a total of 755.00 from holding Weyco Group or generate 26.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 46.56% |
| Values | Daily Returns |
Weyco Group vs. The Kansai Electric
Performance |
| Timeline |
| Weyco Group |
| Kansai Electric |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Weyco and Kansai Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Weyco and Kansai Electric
The main advantage of trading using opposite Weyco and Kansai Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Weyco position performs unexpectedly, Kansai Electric 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 Kansai Electric will offset losses from the drop in Kansai Electric's long position.The idea behind Weyco Group and The Kansai Electric 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.| Kansai Electric vs. Philip Morris International | Kansai Electric vs. Universal | Kansai Electric vs. Saia Inc | Kansai Electric vs. Willamette Valley Vineyards |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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