Correlation Between Weis Markets and Walmart
Can any of the company-specific risk be diversified away by investing in both Weis Markets and Walmart 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 Walmart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Weis Markets and Walmart, you can compare the effects of market volatilities on Weis Markets and Walmart 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 Walmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Weis Markets and Walmart.
Diversification Opportunities for Weis Markets and Walmart
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Weis and Walmart is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Weis Markets and Walmart in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walmart 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 Walmart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Walmart has no effect on the direction of Weis Markets i.e., Weis Markets and Walmart go up and down completely randomly.
Pair Corralation between Weis Markets and Walmart
Considering the 90-day investment horizon Weis Markets is expected to generate 3.61 times less return on investment than Walmart. In addition to that, Weis Markets is 1.57 times more volatile than Walmart. It trades about 0.03 of its total potential returns per unit of risk. Walmart is currently generating about 0.15 per unit of volatility. If you would invest 5,050 in Walmart on September 2, 2024 and sell it today you would earn a total of 4,200 from holding Walmart or generate 83.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Weis Markets vs. Walmart
Performance |
| Timeline |
| Weis Markets |
| Walmart |
Weis Markets and Walmart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Weis Markets and Walmart
The main advantage of trading using opposite Weis Markets and Walmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Weis Markets position performs unexpectedly, Walmart 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 Walmart will offset losses from the drop in Walmart's long position.| Weis Markets vs. Ingles Markets Incorporated | Weis Markets vs. Grocery Outlet Holding | Weis Markets vs. Ocado Group plc | Weis Markets vs. Sprouts Farmers Market |
| Walmart vs. Costco Wholesale Corp | Walmart vs. Dollar Tree | Walmart vs. BJs Wholesale Club | Walmart vs. Target |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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