Correlation Between Weis Markets and Kroger
Can any of the company-specific risk be diversified away by investing in both Weis Markets and Kroger 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 Weis Markets and Kroger into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Weis Markets and Kroger Company, you can compare the effects of market volatilities on Weis Markets and Kroger 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 Weis Markets with a short position of Kroger. Check out your portfolio center. Please also check ongoing floating volatility patterns of Weis Markets and Kroger.
Diversification Opportunities for Weis Markets and Kroger
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Weis and Kroger is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Weis Markets and Kroger Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kroger Company and Weis Markets 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 Weis Markets are associated (or correlated) with Kroger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kroger Company has no effect on the direction of Weis Markets i.e., Weis Markets and Kroger go up and down completely randomly.
Pair Corralation between Weis Markets and Kroger
Considering the 90-day investment horizon Weis Markets is expected to generate 1.19 times more return on investment than Kroger. However, Weis Markets is 1.19 times more volatile than Kroger Company. It trades about 0.04 of its potential returns per unit of risk. Kroger Company is currently generating about 0.05 per unit of risk. If you would invest 6,417 in Weis Markets on October 22, 2024 and sell it today you would earn a total of 240.00 from holding Weis Markets or generate 3.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Weis Markets vs. Kroger Company
Performance |
| Timeline |
| Weis Markets |
| Kroger Company |
Weis Markets and Kroger Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Weis Markets and Kroger
The main advantage of trading using opposite Weis Markets and Kroger positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Weis Markets position performs unexpectedly, Kroger 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 Kroger will offset losses from the drop in Kroger's long position.| Weis Markets vs. Natural Grocers by | Weis Markets vs. Ingles Markets Incorporated | Weis Markets vs. Grocery Outlet Holding | Weis Markets vs. Village Super Market |
| Kroger vs. Grocery Outlet Holding | Kroger vs. Sprouts Farmers Market | Kroger vs. Weis Markets | Kroger vs. Ingles Markets Incorporated |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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