Correlation Between Koninklijke Ahold and Weis Markets
Can any of the company-specific risk be diversified away by investing in both Koninklijke Ahold and Weis Markets 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 Koninklijke Ahold and Weis Markets into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Koninklijke Ahold Delhaize and Weis Markets, you can compare the effects of market volatilities on Koninklijke Ahold and Weis Markets 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 Koninklijke Ahold with a short position of Weis Markets. Check out your portfolio center. Please also check ongoing floating volatility patterns of Koninklijke Ahold and Weis Markets.
Diversification Opportunities for Koninklijke Ahold and Weis Markets
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Koninklijke and Weis is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Koninklijke Ahold Delhaize and Weis Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weis Markets and Koninklijke Ahold 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 Koninklijke Ahold Delhaize are associated (or correlated) with Weis Markets. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Weis Markets has no effect on the direction of Koninklijke Ahold i.e., Koninklijke Ahold and Weis Markets go up and down completely randomly.
Pair Corralation between Koninklijke Ahold and Weis Markets
Assuming the 90 days horizon Koninklijke Ahold is expected to generate 4.61 times less return on investment than Weis Markets. But when comparing it to its historical volatility, Koninklijke Ahold Delhaize is 1.87 times less risky than Weis Markets. It trades about 0.1 of its potential returns per unit of risk. Weis Markets is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 6,353 in Weis Markets on August 31, 2024 and sell it today you would earn a total of 926.00 from holding Weis Markets or generate 14.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Koninklijke Ahold Delhaize vs. Weis Markets
Performance |
| Timeline |
| Koninklijke Ahold |
| Weis Markets |
Koninklijke Ahold and Weis Markets Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Koninklijke Ahold and Weis Markets
The main advantage of trading using opposite Koninklijke Ahold and Weis Markets positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Koninklijke Ahold position performs unexpectedly, Weis Markets 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 Weis Markets will offset losses from the drop in Weis Markets' long position.| Koninklijke Ahold vs. Weis Markets | Koninklijke Ahold vs. Albertsons Companies | Koninklijke Ahold vs. Dingdong ADR | Koninklijke Ahold vs. Natural Grocers by |
| Weis Markets vs. Natural Grocers by | Weis Markets vs. Village Super Market | Weis Markets vs. Ingles Markets Incorporated | Weis Markets vs. Ocado Group plc |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk |