Correlation Between Seven I and Weis Markets
Can any of the company-specific risk be diversified away by investing in both Seven I 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 Seven I and Weis Markets into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Seven i Holdings and Weis Markets, you can compare the effects of market volatilities on Seven I 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 Seven I with a short position of Weis Markets. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seven I and Weis Markets.
Diversification Opportunities for Seven I and Weis Markets
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Seven and Weis is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Seven i Holdings and Weis Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weis Markets and Seven I 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 Seven i Holdings 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 Seven I i.e., Seven I and Weis Markets go up and down completely randomly.
Pair Corralation between Seven I and Weis Markets
Assuming the 90 days horizon Seven I is expected to generate 1.27 times less return on investment than Weis Markets. In addition to that, Seven I is 1.7 times more volatile than Weis Markets. It trades about 0.13 of its total potential returns per unit of risk. Weis Markets is currently generating about 0.29 per unit of volatility. If you would invest 6,260 in Weis Markets on September 1, 2024 and sell it today you would earn a total of 1,023 from holding Weis Markets or generate 16.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Seven i Holdings vs. Weis Markets
Performance |
| Timeline |
| Seven i Holdings |
| Weis Markets |
Seven I and Weis Markets Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seven I and Weis Markets
The main advantage of trading using opposite Seven I and Weis Markets positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seven I 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.The idea behind Seven i Holdings and Weis Markets pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Weis Markets vs. Ingles Markets Incorporated | Weis Markets vs. Sendas Distribuidora SA | Weis Markets vs. Grocery Outlet Holding | Weis Markets vs. Ocado Group plc |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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