Correlation Between Weyco and Univest Pennsylvania
Can any of the company-specific risk be diversified away by investing in both Weyco and Univest Pennsylvania 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 Univest Pennsylvania into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Weyco Group and Univest Pennsylvania, you can compare the effects of market volatilities on Weyco and Univest Pennsylvania 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 Univest Pennsylvania. Check out your portfolio center. Please also check ongoing floating volatility patterns of Weyco and Univest Pennsylvania.
Diversification Opportunities for Weyco and Univest Pennsylvania
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Weyco and Univest is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Weyco Group and Univest Pennsylvania in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Univest Pennsylvania 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 Univest Pennsylvania. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Univest Pennsylvania has no effect on the direction of Weyco i.e., Weyco and Univest Pennsylvania go up and down completely randomly.
Pair Corralation between Weyco and Univest Pennsylvania
Given the investment horizon of 90 days Weyco Group is expected to under-perform the Univest Pennsylvania. In addition to that, Weyco is 2.0 times more volatile than Univest Pennsylvania. It trades about -0.23 of its total potential returns per unit of risk. Univest Pennsylvania is currently generating about -0.01 per unit of volatility. If you would invest 3,176 in Univest Pennsylvania on September 12, 2024 and sell it today you would lose (9.00) from holding Univest Pennsylvania or give up 0.28% 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. Univest Pennsylvania
Performance |
| Timeline |
| Weyco Group |
| Univest Pennsylvania |
Weyco and Univest Pennsylvania Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Weyco and Univest Pennsylvania
The main advantage of trading using opposite Weyco and Univest Pennsylvania positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Weyco position performs unexpectedly, Univest Pennsylvania 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 Univest Pennsylvania will offset losses from the drop in Univest Pennsylvania's long position.The idea behind Weyco Group and Univest Pennsylvania 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.| Univest Pennsylvania vs. JPMorgan Chase Co | Univest Pennsylvania vs. Citigroup | Univest Pennsylvania vs. Wells Fargo | Univest Pennsylvania vs. Toronto Dominion Bank |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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