Correlation Between RadNet and Weyco

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

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

Diversification Opportunities for RadNet and Weyco

0.71

Correlation Coefficient

RadNet  Weyco

Poor diversification

The 3 months correlation between RadNet and Weyco is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding RadNet Inc and Weyco Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weyco Group and RadNet 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 RadNet Inc 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 RadNet i.e., RadNet and Weyco go up and down completely randomly.

Pair Corralation between RadNet and Weyco

Given the investment horizon of 90 days RadNet Inc is expected to generate 1.06 times more return on investment than Weyco. However, RadNet is 1.06 times more volatile than Weyco Group. It trades about 0.13 of its potential returns per unit of risk. Weyco Group is currently generating about 0.05 per unit of risk. If you would invest  6,431  in RadNet Inc on August 27, 2024 and sell it today you would earn a total of  1,773  from holding RadNet Inc or generate 27.57% return on investment over 90 days.

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

RadNet Inc  vs.  Weyco Group

RadNet Inc

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in RadNet Inc are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, RadNet unveiled solid returns over the last few months and may actually be approaching a breakup point.

Weyco Group

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Weyco Group are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Weyco may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with RadNet and Weyco

The main advantage of trading using opposite RadNet and Weyco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RadNet 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 RadNet Inc 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.

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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.