Correlation Between Weis Markets and Sally Beauty
Can any of the company-specific risk be diversified away by investing in both Weis Markets and Sally Beauty 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 Sally Beauty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Weis Markets and Sally Beauty Holdings, you can compare the effects of market volatilities on Weis Markets and Sally Beauty 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 Sally Beauty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Weis Markets and Sally Beauty.
Diversification Opportunities for Weis Markets and Sally Beauty
0.09 | Correlation Coefficient |
Significant diversification
The 1 month correlation between Weis and Sally is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Weis Markets and Sally Beauty Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sally Beauty Holdings 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 Sally Beauty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sally Beauty Holdings has no effect on the direction of Weis Markets i.e., Weis Markets and Sally Beauty go up and down completely randomly.
Pair Corralation between Weis Markets and Sally Beauty
Considering the 90-day investment horizon Weis Markets is expected to generate 0.55 times more return on investment than Sally Beauty. However, Weis Markets is 1.83 times less risky than Sally Beauty. It trades about 0.08 of its potential returns per unit of risk. Sally Beauty Holdings is currently generating about -0.02 per unit of risk. If you would invest 6,198 in Weis Markets on February 8, 2024 and sell it today you would earn a total of 115.00 from holding Weis Markets or generate 1.86% return on investment over 90 days.
| Time Period | 1 Month [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Weis Markets vs. Sally Beauty Holdings
Performance |
| Timeline |
| Weis Markets |
| Sally Beauty Holdings |
Weis Markets and Sally Beauty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Weis Markets and Sally Beauty
The main advantage of trading using opposite Weis Markets and Sally Beauty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Weis Markets position performs unexpectedly, Sally Beauty 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 Sally Beauty will offset losses from the drop in Sally Beauty's long position.| Weis Markets vs. Natural Grocers by | Weis Markets vs. Ingles Markets Incorporated | Weis Markets vs. Sendas Distribuidora SA | Weis Markets vs. Grocery Outlet Holding |
| Sally Beauty vs. LesliesInc | Sally Beauty vs. National Vision Holdings | Sally Beauty vs. Sportsmans | Sally Beauty vs. MarineMax |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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