Correlation Between Salesforce and Weyco

Can any of the company-specific risk be diversified away by investing in both Salesforce and Weyco 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 Salesforce and Weyco into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Salesforce and Weyco Group, you can compare the effects of market volatilities on Salesforce and Weyco 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 Salesforce with a short position of Weyco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and Weyco.

Diversification Opportunities for Salesforce and Weyco

0.35

Correlation Coefficient

Salesforce  Weyco

Weak diversification

The 3 months correlation between Salesforce and Weyco is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Weyco Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weyco Group and Salesforce 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 Salesforce are associated (or correlated) with Weyco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Weyco Group has no effect on the direction of Salesforce i.e., Salesforce and Weyco go up and down completely randomly.

Pair Corralation between Salesforce and Weyco

Considering the 90-day investment horizon Salesforce is expected to under-perform the Weyco. But the stock apears to be less risky and, when comparing its historical volatility, Salesforce is 1.42 times less risky than Weyco. The stock trades about -0.08 of its potential returns per unit of risk. The Weyco Group is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  3,044  in Weyco Group on May 5, 2025 and sell it today you would lose (194.00) from holding Weyco Group or give up 6.37% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Salesforce  vs.  Weyco Group

Salesforce

Risk-Adjusted Performance

Very Weak

Over the last 90 days Salesforce has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest inconsistent performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Weyco Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Weyco Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Weyco is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Salesforce and Weyco

The main advantage of trading using opposite Salesforce and Weyco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, Weyco 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 Weyco will offset losses from the drop in Weyco's long position.

The idea behind Salesforce and Weyco Group 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.

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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 Valuation module to check real value of public entities based on technical and fundamental data.