Correlation Between Weyco and Lowes Companies
Can any of the company-specific risk be diversified away by investing in both Weyco and Lowes Companies 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 Lowes Companies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Weyco Group and Lowes Companies, you can compare the effects of market volatilities on Weyco and Lowes Companies 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 Lowes Companies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Weyco and Lowes Companies.
Diversification Opportunities for Weyco and Lowes Companies
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Weyco and Lowes is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Weyco Group and Lowes Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lowes Companies 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 Lowes Companies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lowes Companies has no effect on the direction of Weyco i.e., Weyco and Lowes Companies go up and down completely randomly.
Pair Corralation between Weyco and Lowes Companies
Given the investment horizon of 90 days Weyco is expected to generate 1.25 times less return on investment than Lowes Companies. In addition to that, Weyco is 1.3 times more volatile than Lowes Companies. It trades about 0.02 of its total potential returns per unit of risk. Lowes Companies is currently generating about 0.04 per unit of volatility. If you would invest 18,013 in Lowes Companies on January 31, 2024 and sell it today you would earn a total of 5,081 from holding Lowes Companies or generate 28.21% 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. Lowes Companies
Performance |
Timeline |
Weyco Group |
Lowes Companies |
Weyco and Lowes Companies Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Weyco and Lowes Companies
The main advantage of trading using opposite Weyco and Lowes Companies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Weyco position performs unexpectedly, Lowes Companies 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 Lowes Companies will offset losses from the drop in Lowes Companies' long position.Weyco vs. The Chefs Warehouse | Weyco vs. G Willi Food International | Weyco vs. SpartanNash Co | Weyco vs. Calavo Growers |
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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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