Correlation Between Weyco and Skechers USA
Can any of the company-specific risk be diversified away by investing in both Weyco and Skechers USA 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 Skechers USA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Weyco Group and Skechers USA, you can compare the effects of market volatilities on Weyco and Skechers USA 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 Skechers USA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Weyco and Skechers USA.
Diversification Opportunities for Weyco and Skechers USA
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Weyco and Skechers is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Weyco Group and Skechers USA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Skechers USA 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 Skechers USA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Skechers USA has no effect on the direction of Weyco i.e., Weyco and Skechers USA go up and down completely randomly.
Pair Corralation between Weyco and Skechers USA
Given the investment horizon of 90 days Weyco Group is expected to generate 3.27 times more return on investment than Skechers USA. However, Weyco is 3.27 times more volatile than Skechers USA. It trades about 0.1 of its potential returns per unit of risk. Skechers USA is currently generating about 0.0 per unit of risk. If you would invest 3,368 in Weyco Group on August 27, 2024 and sell it today you would earn a total of 277.00 from holding Weyco Group or generate 8.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Weyco Group vs. Skechers USA
Performance |
| Timeline |
| Weyco Group |
| Skechers USA |
Weyco and Skechers USA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Weyco and Skechers USA
The main advantage of trading using opposite Weyco and Skechers USA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Weyco position performs unexpectedly, Skechers USA 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 Skechers USA will offset losses from the drop in Skechers USA's long position.The idea behind Weyco Group and Skechers USA 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.| Skechers USA vs. On Holding | Skechers USA vs. Steven Madden | Skechers USA vs. Crocs Inc | Skechers USA vs. Designer Brands |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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