Correlation Between Dingdong ADR and Weis Markets
Can any of the company-specific risk be diversified away by investing in both Dingdong ADR 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 Dingdong ADR and Weis Markets into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dingdong ADR and Weis Markets, you can compare the effects of market volatilities on Dingdong ADR 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 Dingdong ADR with a short position of Weis Markets. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dingdong ADR and Weis Markets.
Diversification Opportunities for Dingdong ADR and Weis Markets
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Dingdong and Weis is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Dingdong ADR and Weis Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weis Markets and Dingdong ADR 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 Dingdong ADR 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 Dingdong ADR i.e., Dingdong ADR and Weis Markets go up and down completely randomly.
Pair Corralation between Dingdong ADR and Weis Markets
Considering the 90-day investment horizon Dingdong ADR is expected to generate 3.62 times less return on investment than Weis Markets. In addition to that, Dingdong ADR is 1.9 times more volatile than Weis Markets. It trades about 0.03 of its total potential returns per unit of risk. Weis Markets is currently generating about 0.24 per unit of volatility. If you would invest 6,403 in Weis Markets on August 29, 2024 and sell it today you would earn a total of 898.00 from holding Weis Markets or generate 14.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dingdong ADR vs. Weis Markets
Performance |
| Timeline |
| Dingdong ADR |
| Weis Markets |
Dingdong ADR and Weis Markets Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dingdong ADR and Weis Markets
The main advantage of trading using opposite Dingdong ADR and Weis Markets positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dingdong ADR 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.| Dingdong ADR vs. Village Super Market | Dingdong ADR vs. Weis Markets | Dingdong ADR vs. Sendas Distribuidora SA | Dingdong ADR vs. Ingles Markets Incorporated |
| Weis Markets vs. Innovative Food Hldg | Weis Markets vs. Calavo Growers | Weis Markets vs. The Chefs Warehouse | Weis Markets vs. AMCON Distributing |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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