Correlation Between Woolworths Group and Weis Markets
Can any of the company-specific risk be diversified away by investing in both Woolworths Group 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 Woolworths Group and Weis Markets into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Woolworths Group Limited and Weis Markets, you can compare the effects of market volatilities on Woolworths Group 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 Woolworths Group with a short position of Weis Markets. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woolworths Group and Weis Markets.
Diversification Opportunities for Woolworths Group and Weis Markets
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Woolworths and Weis is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Woolworths Group Limited and Weis Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weis Markets and Woolworths Group 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 Woolworths Group Limited 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 Woolworths Group i.e., Woolworths Group and Weis Markets go up and down completely randomly.
Pair Corralation between Woolworths Group and Weis Markets
Assuming the 90 days horizon Woolworths Group Limited is expected to under-perform the Weis Markets. In addition to that, Woolworths Group is 1.25 times more volatile than Weis Markets. It trades about -0.22 of its total potential returns per unit of risk. Weis Markets is currently generating about 0.26 per unit of volatility. 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 |
Woolworths Group Limited vs. Weis Markets
Performance |
| Timeline |
| Woolworths Group |
| Weis Markets |
Woolworths Group and Weis Markets Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woolworths Group and Weis Markets
The main advantage of trading using opposite Woolworths Group and Weis Markets positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woolworths Group 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.| Woolworths Group vs. Natural Grocers by | Woolworths Group vs. Grocery Outlet Holding | Woolworths Group vs. Village Super Market | Woolworths Group vs. Ingles Markets Incorporated |
| Weis Markets vs. Innovative Food Hldg | Weis Markets vs. Calavo Growers | Weis Markets vs. The Chefs Warehouse | Weis Markets vs. AMCON Distributing |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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