Correlation Between Ocado Group and Weis Markets
Can any of the company-specific risk be diversified away by investing in both Ocado Group 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 Ocado Group and Weis Markets into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ocado Group PLC and Weis Markets, you can compare the effects of market volatilities on Ocado Group 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 Ocado Group with a short position of Weis Markets. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ocado Group and Weis Markets.
Diversification Opportunities for Ocado Group and Weis Markets
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ocado and Weis is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Ocado Group PLC and Weis Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weis Markets and Ocado Group 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 Ocado Group PLC 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 Ocado Group i.e., Ocado Group and Weis Markets go up and down completely randomly.
Pair Corralation between Ocado Group and Weis Markets
Assuming the 90 days horizon Ocado Group PLC is expected to generate 2.5 times more return on investment than Weis Markets. However, Ocado Group is 2.5 times more volatile than Weis Markets. It trades about 0.18 of its potential returns per unit of risk. Weis Markets is currently generating about 0.17 per unit of risk. If you would invest 355.00 in Ocado Group PLC on November 9, 2024 and sell it today you would earn a total of 50.00 from holding Ocado Group PLC or generate 14.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ocado Group PLC vs. Weis Markets
Performance |
| Timeline |
| Ocado Group PLC |
| Weis Markets |
Ocado Group and Weis Markets Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ocado Group and Weis Markets
The main advantage of trading using opposite Ocado Group and Weis Markets positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ocado Group 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.| Ocado Group vs. Tesco PLC | Ocado Group vs. Dairy Farm International | Ocado Group vs. Woolworths Group Limited | Ocado Group vs. Kesko Oyj ADR |
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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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