Correlation Between Weis Markets and Ocado Group
Can any of the company-specific risk be diversified away by investing in both Weis Markets and Ocado Group 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 Ocado Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Weis Markets and Ocado Group PLC, you can compare the effects of market volatilities on Weis Markets and Ocado Group 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 Ocado Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Weis Markets and Ocado Group.
Diversification Opportunities for Weis Markets and Ocado Group
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Weis and Ocado is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Weis Markets and Ocado Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ocado Group PLC 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 Ocado Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ocado Group PLC has no effect on the direction of Weis Markets i.e., Weis Markets and Ocado Group go up and down completely randomly.
Pair Corralation between Weis Markets and Ocado Group
Considering the 90-day investment horizon Weis Markets is expected to generate 0.39 times more return on investment than Ocado Group. However, Weis Markets is 2.59 times less risky than Ocado Group. It trades about -0.01 of its potential returns per unit of risk. Ocado Group PLC is currently generating about -0.01 per unit of risk. If you would invest 8,134 in Weis Markets on November 9, 2024 and sell it today you would lose (1,051) from holding Weis Markets or give up 12.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Weis Markets vs. Ocado Group PLC
Performance |
| Timeline |
| Weis Markets |
| Ocado Group PLC |
Weis Markets and Ocado Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Weis Markets and Ocado Group
The main advantage of trading using opposite Weis Markets and Ocado Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Weis Markets position performs unexpectedly, Ocado Group 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 Ocado Group will offset losses from the drop in Ocado Group'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 |
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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