Correlation Between Kroger and Weis Markets
Can any of the company-specific risk be diversified away by investing in both Kroger 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 Kroger and Weis Markets into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kroger Company and Weis Markets, you can compare the effects of market volatilities on Kroger 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 Kroger with a short position of Weis Markets. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kroger and Weis Markets.
Diversification Opportunities for Kroger and Weis Markets
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kroger and Weis is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Kroger Company and Weis Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weis Markets and Kroger 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 Kroger Company 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 Kroger i.e., Kroger and Weis Markets go up and down completely randomly.
Pair Corralation between Kroger and Weis Markets
Allowing for the 90-day total investment horizon Kroger is expected to generate 2.56 times less return on investment than Weis Markets. But when comparing it to its historical volatility, Kroger Company is 1.94 times less risky than Weis Markets. It trades about 0.2 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 28, 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 | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kroger Company vs. Weis Markets
Performance |
| Timeline |
| Kroger Company |
| Weis Markets |
Kroger and Weis Markets Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kroger and Weis Markets
The main advantage of trading using opposite Kroger and Weis Markets positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kroger 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.| Kroger vs. Innovative Food Hldg | Kroger vs. Calavo Growers | Kroger vs. The Chefs Warehouse | Kroger vs. AMCON Distributing |
| 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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