Correlation Between Weyco and Unity Software

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

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

Diversification Opportunities for Weyco and Unity Software

0.19

Correlation Coefficient

Weyco  Unity Software

Average diversification

The 3 months correlation between Weyco and Unity is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Weyco Group and Unity Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unity Software 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 Unity Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unity Software has no effect on the direction of Weyco i.e., Weyco and Unity Software go up and down completely randomly.

Pair Corralation between Weyco and Unity Software

Given the investment horizon of 90 days Weyco Group is expected to generate 1.27 times more return on investment than Unity Software. However, Weyco is 1.27 times more volatile than Unity Software. It trades about 0.13 of its potential returns per unit of risk. Unity Software is currently generating about -0.29 per unit of risk. If you would invest  3,500  in Weyco Group on August 19, 2024 and sell it today you would earn a total of  389.00  from holding Weyco Group or generate 11.11% return on investment over 90 days.

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

Weyco Group  vs.  Unity Software

Weyco Group

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Weyco Group are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent basic indicators, Weyco unveiled solid returns over the last few months and may actually be approaching a breakup point.

Unity Software

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Unity Software are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Unity Software may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with Weyco and Unity Software

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

The idea behind Weyco Group and Unity Software 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 CEOs Directory module to screen CEOs from public companies around the world.