Correlation Between Kesko Oyj and Weis Markets
Can any of the company-specific risk be diversified away by investing in both Kesko Oyj 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 Kesko Oyj and Weis Markets into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kesko Oyj ADR and Weis Markets, you can compare the effects of market volatilities on Kesko Oyj 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 Kesko Oyj with a short position of Weis Markets. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kesko Oyj and Weis Markets.
Diversification Opportunities for Kesko Oyj and Weis Markets
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Kesko and Weis is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Kesko Oyj ADR and Weis Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weis Markets and Kesko Oyj 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 Kesko Oyj 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 Kesko Oyj i.e., Kesko Oyj and Weis Markets go up and down completely randomly.
Pair Corralation between Kesko Oyj and Weis Markets
Assuming the 90 days horizon Kesko Oyj is expected to generate 3.18 times less return on investment than Weis Markets. But when comparing it to its historical volatility, Kesko Oyj ADR is 1.06 times less risky than Weis Markets. It trades about 0.09 of its potential returns per unit of risk. Weis Markets is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 6,403 in Weis Markets on August 27, 2024 and sell it today you would earn a total of 974.00 from holding Weis Markets or generate 15.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kesko Oyj ADR vs. Weis Markets
Performance |
| Timeline |
| Kesko Oyj ADR |
| Weis Markets |
Kesko Oyj and Weis Markets Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kesko Oyj and Weis Markets
The main advantage of trading using opposite Kesko Oyj and Weis Markets positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kesko Oyj 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.| Kesko Oyj vs. Natural Grocers by | Kesko Oyj vs. Grocery Outlet Holding | Kesko Oyj vs. Village Super Market | Kesko Oyj 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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