Correlation Between Natural Grocers and Weis Markets
Can any of the company-specific risk be diversified away by investing in both Natural Grocers 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 Natural Grocers and Weis Markets into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Natural Grocers by and Weis Markets, you can compare the effects of market volatilities on Natural Grocers 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 Natural Grocers with a short position of Weis Markets. Check out your portfolio center. Please also check ongoing floating volatility patterns of Natural Grocers and Weis Markets.
Diversification Opportunities for Natural Grocers and Weis Markets
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Natural and Weis is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Natural Grocers by and Weis Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weis Markets and Natural Grocers 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 Natural Grocers by 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 Natural Grocers i.e., Natural Grocers and Weis Markets go up and down completely randomly.
Pair Corralation between Natural Grocers and Weis Markets
Given the investment horizon of 90 days Natural Grocers by is expected to generate 1.67 times more return on investment than Weis Markets. However, Natural Grocers is 1.67 times more volatile than Weis Markets. It trades about 0.11 of its potential returns per unit of risk. Weis Markets is currently generating about 0.04 per unit of risk. If you would invest 1,055 in Natural Grocers by on February 22, 2024 and sell it today you would earn a total of 1,035 from holding Natural Grocers by or generate 98.1% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Natural Grocers by vs. Weis Markets
Performance |
Timeline |
Natural Grocers by |
Weis Markets |
Natural Grocers and Weis Markets Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Natural Grocers and Weis Markets
The main advantage of trading using opposite Natural Grocers and Weis Markets positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Natural Grocers 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.Natural Grocers vs. Village Super Market | Natural Grocers vs. Ingles Markets Incorporated | Natural Grocers vs. Ocado Group plc | Natural Grocers vs. Sendas Distribuidora SA |
Weis Markets vs. Natural Grocers by | Weis Markets vs. Village Super Market | Weis Markets vs. Ingles Markets Incorporated | Weis Markets vs. Ocado Group plc |
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 Correlations module to find global opportunities by holding instruments from different markets.
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