Correlation Between Weis Markets and Woolworths Group
Can any of the company-specific risk be diversified away by investing in both Weis Markets and Woolworths 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 Woolworths 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 Woolworths Group Limited, you can compare the effects of market volatilities on Weis Markets and Woolworths 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 Woolworths Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Weis Markets and Woolworths Group.
Diversification Opportunities for Weis Markets and Woolworths Group
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Weis and Woolworths is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Weis Markets and Woolworths Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Woolworths Group 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 Woolworths Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Woolworths Group has no effect on the direction of Weis Markets i.e., Weis Markets and Woolworths Group go up and down completely randomly.
Pair Corralation between Weis Markets and Woolworths Group
Considering the 90-day investment horizon Weis Markets is expected to generate 0.8 times more return on investment than Woolworths Group. However, Weis Markets is 1.25 times less risky than Woolworths Group. It trades about 0.26 of its potential returns per unit of risk. Woolworths Group Limited is currently generating about -0.22 per unit of risk. If you would invest 6,403 in Weis Markets on August 28, 2024 and sell it today you would earn a total of 974.00 from holding Weis Markets or generate 15.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Weis Markets vs. Woolworths Group Limited
Performance |
| Timeline |
| Weis Markets |
| Woolworths Group |
Weis Markets and Woolworths Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Weis Markets and Woolworths Group
The main advantage of trading using opposite Weis Markets and Woolworths Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Weis Markets position performs unexpectedly, Woolworths 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 Woolworths Group will offset losses from the drop in Woolworths Group's long position.| Weis Markets vs. Innovative Food Hldg | Weis Markets vs. Calavo Growers | Weis Markets vs. The Chefs Warehouse | Weis Markets vs. AMCON Distributing |
| Woolworths Group vs. Natural Grocers by | Woolworths Group vs. Grocery Outlet Holding | Woolworths Group vs. Village Super Market | Woolworths Group 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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