Correlation Between Target and Weis Markets
Can any of the company-specific risk be diversified away by investing in both Target 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 Target and Weis Markets into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Target and Weis Markets, you can compare the effects of market volatilities on Target 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 Target with a short position of Weis Markets. Check out your portfolio center. Please also check ongoing floating volatility patterns of Target and Weis Markets.
Diversification Opportunities for Target and Weis Markets
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Target and Weis is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Target and Weis Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weis Markets and Target 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 Target 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 Target i.e., Target and Weis Markets go up and down completely randomly.
Pair Corralation between Target and Weis Markets
Considering the 90-day investment horizon Target is expected to under-perform the Weis Markets. In addition to that, Target is 1.98 times more volatile than Weis Markets. It trades about -0.09 of its total potential returns per unit of risk. Weis Markets is currently generating about 0.25 per unit of volatility. If you would invest 6,395 in Weis Markets on September 2, 2024 and sell it today you would earn a total of 888.00 from holding Weis Markets or generate 13.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Target vs. Weis Markets
Performance |
| Timeline |
| Target |
| Weis Markets |
Target and Weis Markets Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Target and Weis Markets
The main advantage of trading using opposite Target and Weis Markets positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Target 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.| Target vs. Costco Wholesale Corp | Target vs. BJs Wholesale Club | Target vs. Dollar Tree | Target vs. Dollar General |
| Weis Markets vs. Natural Grocers by | Weis Markets vs. Ingles Markets Incorporated | Weis Markets vs. Sendas Distribuidora SA | Weis Markets vs. Grocery Outlet Holding |
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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