Correlation Between Ceconomy and Winmark
Can any of the company-specific risk be diversified away by investing in both Ceconomy and Winmark 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 Ceconomy and Winmark into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ceconomy AG ADR and Winmark, you can compare the effects of market volatilities on Ceconomy and Winmark 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 Ceconomy with a short position of Winmark. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ceconomy and Winmark.
Diversification Opportunities for Ceconomy and Winmark
Very weak diversification
The 3 months correlation between Ceconomy and Winmark is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Ceconomy AG ADR and Winmark in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Winmark and Ceconomy 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 Ceconomy AG ADR are associated (or correlated) with Winmark. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Winmark has no effect on the direction of Ceconomy i.e., Ceconomy and Winmark go up and down completely randomly.
Pair Corralation between Ceconomy and Winmark
Assuming the 90 days horizon Ceconomy is expected to generate 11.22 times less return on investment than Winmark. In addition to that, Ceconomy is 2.67 times more volatile than Winmark. It trades about 0.01 of its total potential returns per unit of risk. Winmark is currently generating about 0.22 per unit of volatility. If you would invest 37,021 in Winmark on August 27, 2024 and sell it today you would earn a total of 3,306 from holding Winmark or generate 8.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ceconomy AG ADR vs. Winmark
Performance |
| Timeline |
| Ceconomy AG ADR |
| Winmark |
Ceconomy and Winmark Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ceconomy and Winmark
The main advantage of trading using opposite Ceconomy and Winmark positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ceconomy position performs unexpectedly, Winmark 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 Winmark will offset losses from the drop in Winmark's long position.| Ceconomy vs. Burlington Stores | Ceconomy vs. Childrens Place | Ceconomy vs. Buckle Inc | Ceconomy vs. Shoe Carnival |
| Winmark vs. Mesa Laboratories | Winmark vs. Utah Medical Products | Winmark vs. Weyco Group | Winmark vs. Diamond Hill Investment |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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