Correlation Between Acco Brands and Weyco

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

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

Diversification Opportunities for Acco Brands and Weyco

0.84

Correlation Coefficient

Acco Brands  Weyco

Very poor diversification

The 3 months correlation between Acco and Weyco is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Acco Brands and Weyco Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weyco Group and Acco Brands 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 Acco Brands 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 Acco Brands i.e., Acco Brands and Weyco go up and down completely randomly.

Pair Corralation between Acco Brands and Weyco

Given the investment horizon of 90 days Acco Brands is expected to under-perform the Weyco. But the stock apears to be less risky and, when comparing its historical volatility, Acco Brands is 1.05 times less risky than Weyco. The stock trades about -0.36 of its potential returns per unit of risk. The Weyco Group is currently generating about -0.12 of returns per unit of risk over similar time horizon. If you would invest  3,062  in Weyco Group on February 1, 2024 and sell it today you would lose (127.00) from holding Weyco Group or give up 4.15% of portfolio value over 90 days.

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

Acco Brands  vs.  Weyco Group

Acco Brands

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Acco Brands has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's fundamental indicators remain very healthy which may send shares a bit higher in June 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

Weyco Group

Risk-Adjusted Performance

0 of 100

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 latest fragile performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Acco Brands and Weyco

The main advantage of trading using opposite Acco Brands and Weyco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acco Brands 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 Acco Brands 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 Global Correlations module to find global opportunities by holding instruments from different markets.